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 Department of Education
 AGENCY: Federal Student Aid, U.S. Department of Education.
 ACTION: Notice.
 SUMMARY: The Secretary announces the annual updates to the tables used in the statutory Federal Need Analysis Methodology that determines a student's expected family contribution (EFC) for award year (AY) 2022-23 for student financial aid programs, Assistance Listing Numbers 84.063, 84.033, 84.007, 84.268, 84.408, and 84.379. The intent of this notice is to alert the financial aid community and the broader public to these required annual updates used in the determination of student aid eligibility.
 FOR FURTHER INFORMATION CONTACT: Kerri Moseley-Hobbs, U.S. Department of Education, Union Center Plaza, 830 First Street NE, Washington, DC 20202-5454. Telephone: (202) 377-3291. If you use a telecommunications device for the deaf (TDD) or a text telephone (TTY), call the Federal Relay Service (FRS), toll free, at 1-800-877-8339.


SUPPLEMENTARY INFORMATION: Part F of title IV of the Higher Education Act of 1965, as amended (HEA), specifies the criteria, data elements, calculations, and tables the Department of Education (Department) uses in the Federal Need Analysis Methodology to determine the EFC. Section 478 of the HEA requires the Secretary to annually update the following four tables for price inflation—the Income Protection Allowance (IPA), the Adjusted Net Worth (NW) of a Business or Farm, the Education Savings and Asset Protection Allowance, and the Assessment Schedules and Rates. The updates are based, in general, upon increases in the Consumer Price Index (CPI). For AY 2022-23, the Secretary is charged with updating the IPA for parents of dependent students, adjusted NW of a business or farm, the education savings and asset protection allowance, and the assessment schedules and rates to account for inflation that took place between December 2020 and December 2021. However, because the Secretary must publish these tables before December 2021, the increases in the tables must be based on a percentage equal to the estimated percentage increase in the Consumer Price Index for All Urban Consumers (CPI-U) for 2021. The Secretary must also account for any under- or over-estimation of inflation for the preceding year. In developing the table values for the 2021-22 AY, the Secretary assumed a 2.0 percent increase in the CPI-U for the period December 2019 through December 2020. The actual inflation for this time period was 1.2 percent. The Secretary estimates that the increase in the CPI-U for the period December 2020 through December 2021 will be 1.8 percent. Additionally, section 601 of the College Cost Reduction and Access Act of 2007 (CCRAA, Pub. L. 110-84) amended sections 475 through 478 of the HEA affecting the IPA tables for the 2009-10 through 2012-13 AYs and required the Department to use a percentage of the estimated CPI to update the table in subsequent years. These changes to the IPA impact dependent students, as well as independent students with dependents other than a spouse and independent students without dependents other than a spouse. This notice includes the new 2022-23 AY values for the IPA tables, which reflect the CCRAA amendments. The updated tables are in sections 1 (Income Protection Allowance), 2 (Adjusted Net Worth of a Business or Farm), and 4 (Assessment Schedules and Rates) of this notice. Under section 478(d) of the HEA, the Secretary must also revise the education 
                    ( print page 38068)
                    savings and asset protection allowances for each AY. The Education Savings and Asset Protection Allowance table for AY 2021-22 has been updated in section 3 of this notice. Section 478(h) of the HEA also requires the Secretary to increase the amount specified for the employment expense allowance, adjusted for inflation. This calculation is based on increases in the Bureau of Labor Statistics' marginal costs budget for a two-worker family compared to a one-worker family. The items covered by this calculation are: Food away from home, apparel, transportation, and household furnishings and operations. The Employment Expense Allowance table for AY 2022-23 has been updated in section 5 of this notice. Section 478(g) of the HEA directs the Secretary to update the tables for State and other taxes after reviewing the Statistics of Income file data maintained by the Internal Revenue Service. After review of the 2018 Statistics of Income data file, the Secretary has determined that for AY 2022-2023 this table will not be updated. Changes to tax law in 2018 resulted in a cap of state, local, and other taxes that can be claimed as deductions on federal income tax returns. This led to a large drop in the share of filers claiming the deduction and thus the total amount of these taxes paid, causing the Statistics of Income data file to less accurately reflect state, local, and other taxes paid in 2018. While the 2018 Statistics of Income data file shows a substantial decline in state, local, and other taxes paid as share of income, more accurate data confirms that the year-over-year change in share of income put toward state and local taxes paid as a share of income grew from 9.80 percent to 9.89 percent. Therefore, the table in section 6 of this notice has not been updated and will remain the same as AY 2021-2022. The HEA requires the following annual updates: 1. 
                    *Income Protection Allowance.*
                     This allowance is the amount of living expenses associated with the maintenance of an individual or family that may be offset against the family's income. The allowance varies by family size. The IPA for dependent students is $7,040. The IPAs for parents of dependent students for AY 2022-23 are as follows: Parents of Dependent Students
Family size
Number in college1
2
3
4
52
$19,630
$16,2703
24,440
21,100
$17,7404
30,190
26,830
23,490
$20,1305
35,620
32,260
28,920
25,560
$22,2206
41,670
38,310
34,970
31,610
28,270
 For each additional family member add $4,700. For each additional college student subtract $3,340. The IPAs for independent students with dependents other than a spouse for AY 2022-23 are as follows: Independent Students With Dependents Other Than a Spouse
Family size
Number in college1
2
3
4
52
$27,720
$22,9803
34,520
29,800
$25,0604
42,620
37,900
33,180
$28,4305
50,300
45,550
40,830
36,100
$31,3806
58,820
54,090
49,380
44,620
39,910
 For each additional family member add $6,640. For each additional college student subtract $4,720. The IPAs for single independent students and independent students without dependents other than a spouse for AY 2022-23 are as follows: Independent Students Without Dependents Other Than Spouse
Marital status
Number in college1
2Single
$10,950Married
17,550
$10,950
 2. 
                    *Adjusted Net Worth of a Business or Farm.*
                     A portion of the full NW (assets less debts) of a business or farm is excluded from the calculation of an EFC because (1) the income produced from these assets is already assessed in another part of the formula; and (2) the formula protects a portion of the value of the assets. The portion of these assets included in the contribution calculation is computed according to the following schedule. This schedule is used for parents of dependent students, 
                    ( print page 38069)
                    independent students without dependents other than a spouse, and independent students with dependents other than a spouse. If the NW of a business or farm is
Then the adjusted NW isLess than $1
$0.$1 to $140,000
$0 + 40% of NW.$140,001 to $420,000
$56,000 + 50% of NW over $140,000.$420,001 to $700,000
$196,500 + 60% of NW over $420,000.$700,001 or more
$364,000 + 100% of NW over $700,000.
 3. 
                    *Education Savings and Asset Protection Allowance.*
                     This allowance protects a portion of NW (assets less debts) from being considered available for postsecondary educational expenses. There are three asset protection allowance tables: One for parents of dependent students, one for independent students without dependents other than a spouse, and one for independent students with dependents other than a spouse. Parents of Dependent Students, and Independent Students With Dependents Other Than a Spouse, and  Independent Students Without Dependents Other Than a Spouse
If the age of the older parent is, or If the age of the independent student is
And the older parent or the independent student isMarried
SingleThen the allowance is25 or less
0
026
200
027
400
028
600
029
800
030
1,000
031
1,200
032
1,400
033
1,700
034
1,900
035
2,100
036
2,300
037
2,500
038
2,700
039
2,900
040
3,100
041
3,200
042
3,200
043
3,300
044
3,400
045
3,500
046
3,600
047
3,700
048
3,700
049
3,800
050
3,900
051
4,000
052
4,100
053
4,200
054
4,400
055
4,500
056
4,600
057
4,700
058
4,900
059
5,000
060
5,100
061
5,300
062
5,400
063
5,600
064
5,800
065 or older
5,900
0
 4. 
                    *Assessment Schedules and Rates.*
                     Two schedules that are subject to updates—one for parents of dependent students and one for independent students with dependents other than a spouse—are used to determine the EFC from family financial resources that contribute to educational expenses. For dependent students, the EFC is derived 
                    ( print page 38070)
                    from an assessment of the parents' adjusted available income (AAI). For independent students with dependents other than a spouse, the EFC is derived from an assessment of the family's AAI. The AAI represents a measure of a family's financial strength, which considers both income and assets. The contribution of parents of dependent students, and independent students with dependents other than a spouse, is computed according to the following schedule: If AAI is
Then the contribution isLess than −$3,409
−$750.−$3,409 to $17,500
22% of AAI.$17,501 to $22,000
$3,850 + 25% of AAI over $17,500.$22,001 to $26,500
$4,975 + 29% of AAI over $22,000.$26,501 to $31,000
$6,280 + 34% of AAI over $26,500.$30,001 to $35,500
$7,810 + 40% of AAI over $31,000.$35,501 or more
$9,610 + 47% of AAI over $35,500.
 5. 
                    *Employment Expense Allowance.*
                     This allowance for employment-related expenses—which is used for the parents of dependent students and for married independent students—recognizes additional expenses incurred by working spouses and single-parent households. The allowance is based on the marginal differences in costs for a two-worker family compared to a one-worker family. The items covered by these additional expenses are: Food away from home, apparel, transportation, and household furnishings and operations. The employment expense allowance for parents of dependent students, married independent students without dependents other than a spouse, and independent students with dependents other than a spouse is the lesser of $4,000 or 35 percent of earned income. 6. 
                    *Allowance for State and Other Taxes.*
                     The allowance for State and other taxes protects a portion of parents' and students' incomes from being considered available for postsecondary educational expenses. There are four categories for State and other taxes, one each for parents of dependent students, independent students with dependents other than a spouse, dependent students, and independent students without dependents other than a spouse. Percent of Income Paid in State Taxes by State, Dependency Status, and Income Level
State
Parents of dependent students and independent students with dependents other than a spouse
Dependent students and independent students
                             without  
                             dependents other than a spouseIncome under $15,000
Income $15,000 & up
All incomeAlabama
3
2
2Alaska
2
1
0Arizona
4
3
2Arkansas
4
3
3California
9
8
6Colorado
4
3
3Connecticut
9
8
5Delaware
5
4
3District of Columbia
7
6
6Florida
3
2
1Georgia
5
4
4Hawaii
5
4
4Idaho
5
4
4Illinois
6
5
3Indiana
4
3
3Iowa
5
4
3Kansas
4
3
3Kentucky
5
4
4Louisana
3
2
2Maine
6
5
3Maryland
8
7
6Massachussets
7
6
4Michigan
5
4
3Minnesota
7
6
5Mississippi
3
2
2Missouri
5
4
3Montana
5
4
3Nebraska
5
4
3Nevada
3
2
1New Hampshire
4
3
1New Jersey
9
8
5New Mexico
3
2
2( print page 38071)New York
10
9
7North Carolina
5
4
3North Dakota
2
1
1Ohio
5
4
3Oklahoma
3
2
2Oregon
7
6
5Pennsylvania
5
4
3Rhode Island
6
5
4South Carolina
4
3
3South Dakota
2
1
1Tennessee
2
1
1Texas
3
2
1Utah
5
4
4Vermont
6
5
3Virginia
6
5
4Washington
3
2
1West Virginia
3
2
3Wisconsin
6
5
4Wyoming
2
1
1Other
2
1
1
 *Accessible Format:*
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                    . You may access the official edition of the 
                    **Federal Register**
                     and the Code of Federal Regulations at 
                    *www.govinfo.gov.*
                     At this site you can view this document, as well as all other documents of the Department published in the 
                    **Federal Register**
                    *,*
                     in text or Portable Document Format (PDF). To use PDF you must have Adobe Acrobat Reader, which is available free at the site. You may also access documents of the Department published in the 
                    **Federal Register**
                     by using the article search feature at 
                    *www.federalregister.gov.*
                     Specifically, through the advanced search feature at this site, you can limit your search to documents published by the Department. *Program Authority:*20 U.S.C. 1087rr. Richard Cordray, Chief Operating Officer, Federal Student Aid.


[FR Doc. 2021-15217 Filed 7-16-21; 8:45 am] BILLING CODE 4000-01-P