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 Department of Education
 AGENCY: Student Financial Assistance, Department of Education.
 ACTION: Notice of revision of the Federal need analysis methodology for the 2002-2003 award year.
 SUMMARY: The Secretary of Education announces the annual updates to the tables that will be used in the statutory “Federal Need Analysis Methodology” to determine a student's expected family contribution (EFC) for award year 2002-2003 under Part F of Title IV of the Higher Education Act (HEA) of 1965, as amended (Title IV, HEA Programs). An EFC is the amount a student and his or her family may reasonably be expected to contribute toward the student's postsecondary educational costs for purposes of determining financial aid eligibility. The Title IV, HEA Programs include the Federal Pell Grant, campus-based (Federal Perkins Loan, Federal Work-Study, and Federal Supplemental Educational Opportunity Grant Programs), Federal Family Education Loan, and William D. Ford Federal Direct Loan Programs.
 FOR FURTHER INFORMATION CONTACT: Ms. Edith Bell, Program Specialist, U.S. Department of Education, 400 Maryland Avenue, SW (Room 4621, ROB-3), Washington, DC 20202-5444. Telephone: (202) 708-5591. If you use a telecommunications device for the deaf (TDD), you may call the Federal Information Relay Service (FIRS) at 1-800-877-8339. Individuals with disabilities may obtain this document in an alternative format (e.g., Braille, large print, audiotape or computer diskette) on request to the contact person listed in the preceding paragraph.


SUPPLEMENTARY INFORMATION: Part F of Title IV of the HEA specifies the criteria, data elements, calculations, and tables used in the Federal Need Analysis Methodology EFC calculations. Section 478 of Part F of the HEA requires the Secretary to adjust four of the tables—the Income Protection Allowance, the Adjusted Net Worth of a Business or Farm, the Education Savings and Asset Protection Allowance, and the Assessment Schedules and Rates—each award year to take into account inflation. The changes are based, in general, upon increases in the Consumer Price Index. For the award year 2002-2003 the Secretary is charged with updating the income protection allowance, adjusted net worth of a business or farm, and the assessment schedules and rates to account for inflation that took place between December 2000 and December 2001. However, since the Secretary must publish these tables before December 2001, the increases in the tables must be based upon a percentage equal to the estimated percentage increase in the Consumer Price Index for all Urban Consumers for 2000. The Secretary estimates that the increase in the Consumer Price Index for all Urban Consumers for the period December 2000 through December 2001 will be 2.4 percent. The updated tables are in sections 1, 2, and 4 of this notice. The Secretary must also revise, for each award year, the table on asset protection allowance as provided for in section 478(d) of the HEA. The Education Savings and Asset Protection Allowance table for the award year 2002-2003 has been updated in section 3 of this notice. Section 477(b)(5) of Part F of the HEA also requires the Secretary to increase the amount specified for the Employment Expense Allowance to account for inflation based upon increases in the Bureau of Labor Statistics budget of the marginal costs for a two-earner compared to a one-earner family for meals away from home, apparel and upkeep, transportation, and housekeeping services. Therefore, the Secretary is increasing this allowance as described in section 5 of this notice. The HEA provides for 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. It varies by family size. The income protection allowance for the dependent student is $2,330. The income protection allowances for parents of dependent students and independent students with dependents other than a spouse for award year 2002-2003 are: Number in college1
2
3
4
5Family size2
13,210
10,9503
16,450
14,210
11,9404
20,320
18,060
15,810
13,5505
23,980
21,720
19,470
17,210
14,9606
28,050
25,790
23,540
21,280
19,030For each additional family member add $3,170.For each additional college student subtract $2,250.
 The income protection allowances for independent students and independent students without dependents other than a spouse for award year 2002-2003 are: Marital status
Number in college
AmountSingle
1
$5,300Married
2
5,300Married
1
8,470
 2. Adjusted Net Worth (NW) of a Business or Farm A portion of the full net value of a farm or business is excluded from the calculation of an expected contribution since—(1) the income produced from these assets is already assessed in another part of the formula; and (2) the 
                    ( print page 29559)
                    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, independent students, independent student without dependents other than a spouse, and independent students with dependents other than a spouse. If the Net Worth of a Business or Farm is—
Then the Adjusted Net Worth is—Less than      $1
$0$1 to  $95,000
$0 +  40% of NW$95,001 to $285,000
$38,000 +  50% of NW over  $95,000$285,001 to $470,000
$133,000 +  60% of NW over $285,000$470,001 or more
$244,000 + 100% of NW over $470,000
 3. Education Savings and Asset Protection Allowance This allowance protects a portion of net worth (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. Dependent Students
If the age of the older parent is—
And there are—Two parents
One parentThen the education savings and asset protection allowance is—25 or less
0
026
2,300
1,10027
4,600
2,20028
6,900
3,30029
9,100
4,50030
11,400
5,60031
13,700
6,70032
16,000
7,80033
18,300
8,90034
20,600
10,00035
22,900
11,10036
25,200
12,20037
27,400
13,40038
29,700
14,50039
32,000
15,60040
34,300
16,70041
35,200
17,00042
36,100
17,40043
36,700
17,80044
37,700
18,20045
38,600
18,60046
39,600
18,90047
40,600
19,40048
41,900
19,90049
42,900
20,30050
44,000
20,80051
45,100
21,20052
46,500
21,70053
47,600
22,40054
49,100
22,90055
50,300
23,40056
51,800
24,00057
53,300
24,70058
54,900
25,30059
56,600
26,00060
58,300
26,60061
60,000
27,40062
62,000
28,10063
63,800
28,90064
66,000
29,70065 and over
68,200
30,700
 Independent Students Without Dependents Other Than a Spouse
If the age of the student is—
And the student is—Married
SingleThen the education savings and asset protection allowance is—25 or less
0
026
2,300
1,10027
4,600
2,20028
6,900
3,30029
9,100
4,50030
11,400
5,60031
13,700
6,70032
16,000
7,80033
18,300
8,90034
20,600
10,00035
22,900
11,10036
25,200
12,20037
27,400
13,40038
29,700
14,50039
32,000
15,60040
34,300
16,70041
35,200
17,00042
36,100
17,40043
36,700
17,80044
37,700
18,20045
38,600
18,60046
39,600
18,90047
40,600
19,40048
41,900
19,90049
42,900
20,30050
44,000
20,80051
45,100
21,20052
46,500
21,70053
47,600
22,40054
49,100
22,90055
50,300
23,40056
51,800
24,00057
53,300
24,70058
54,900
25,30059
56,600
26,00060
58,300
26,60061
60,000
27,40062
62,000
28,10063
63,800
28,90064
66,000
29,70065 and over
68,200
30,700
 Independent Students With Dependents Other Than a Spouse
If the age of the student is—
And the student is—Married
SingleThen the education savings and asset protection allowance is—25 or less
0
026
2,300
1,10027
4,600
2,20028
6,900
3,30029
9,100
4,50030
11,400
5,60031
13,700
6,70032
16,000
7,80033
18,300
8,90034
20,600
10,00035
22,900
11,10036
25,200
12,20037
27,400
13,40038
29,700
14,50039
32,000
15,60040
34,300
16,70041
35,200
17,00042
36,100
17,40043
36,700
17,80044
37,700
18,20045
38,600
18,60046
39,600
18,90047
40,600
19,40048
41,900
19,90049
42,900
20,30050
44,000
20,80051
45,100
21,20052
46,500
21,70053
47,600
22,40054
49,100
22,90055
50,300
23,40056
51,800
24,00057
53,300
24,70058
54,900
25,30059
56,600
26,00060
58,300
26,600( print page 29560)61
60,000
27,40062
62,000
28,10063
63,800
28,90064
66,000
29,70065 and over
68,200
30,700
 4. Assessment Schedules and Rates Two schedules that are subject to updates, one for dependent students and one for independent students with dependents other than a spouse, are used to determine the expected contribution toward educational expenses from family financial resources. For dependent students, the expected parental contribution is derived from an assessment of the parents adjusted available income (AAI). For independent students with dependents other than a spouse, the expected contribution 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 parents’ contribution for a dependent student is computed according to the following schedule: If AAI is—
Then the Contribution is—Less than −$3,409 ($3,409)
−$750($3,409) to $11,800
22% of AAI$11,801 to $14,800
$2,596 + 25% of AAI over $11,800$14,801 to $17,800
$3,346 + 29% of AAI over $14,800$17,801 to $20,800
$4,216 + 34% of AAI over $17,800$20,801 to $23,900
$5,236 + 40% of AAI over $20,800$23,901 or more
$6,476 + 47% of AAI over $23,900
 The contribution for an independent student with dependents other than a spouse is computed according to the following schedule: If AAI is—
Then the Contribution is—Less than −$3,409 ($3,409)
−$750($3,409) to $11,800
22% of AAI$11,801 to $14,800
$2,596 + 25% of AAI over $11,800$14,801 to $17,800
$3,346 + 29% of AAI over $14,800$17,801 to $20,800
$4,216 + 34% of AAI over $17,800$20,801 to $23,900
$5,236 + 40% of AAI over $20,800$23,901 or more
$6,476 + 47% of AAI over $23,900
 5. Employment Expense Allowance This allowance for employment-related expenses, which is used for the parents of dependent students and for married independent students with dependents, recognizes additional expenses incurred by working spouses and single-parent households. The allowance is based upon the marginal differences in costs for a two wage-earner family compared to a one-wage earner family for meals away from home, apparel and upkeep, transportation, and housekeeping services. 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 $3,000 or 35 percent of earned income. 6. Allowance for State and Other Taxes This allowance for State and other taxes protects a portion of the parents' and student's income from being considered available for postsecondary educational expenses. There are four tables 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. Parents of Dependent Students
If parents' State or territory of residence is—
And parents' total income is—Less than $15,000
$15,000 or moreThen the percentage is—Wyoming, Tennessee, Nevada, Alaska, Texas
3
2Louisiana, Florida, Washington, South Dakota
4
3Alabama, Mississippi
5
4North Dakota, Illinois, Connecticut, New Mexico, Missouri, West Virginia, Arizona, Indiana, Oklahoma, Arkansas
6
5New Hampshire, Pennsylvania, Colorado, Georgia, Kansas, Kentucky, Idaho
7
6North Carolina, Virginia, Delaware, South Carolina, Ohio, Utah, Nebraska, Montana, California, New Jersey, Iowa, Vermont, Hawaii
8
7Massachusetts, Rhode Island, Michigan, Minnesota, Maine, Maryland
9
8( print page 29561)District of Columbia, Wisconsin, Oregon
10
9New York
11
10Other
4
3
 Independent Students With Dependents Other Than a Spouse
If student's State or territory of residence is—
And student's total income is—Less than $15,000
$15,000 or moreThen the percentage is—Wyoming, Tennessee, Nevada, Alaska, Texas
3
2Louisiana, Florida, Washington, South Dakota
4
3Alabama, Mississippi
5
4North Dakota, Illinois, Connecticut, New Mexico, Missouri, West Virginia, Arizona, Indiana, Oklahoma, Arkansas
6
5New Hampshire, Pennsylvania, Colorado, Georgia, Kansas, Kentucky, Idaho
7
6North Carolina, Virginia, Delaware, South Carolina, Ohio, Utah, Nebraska, Montana, California, New Jersey, Iowa, Vermont, Hawaii
8
7Massachusetts, Rhode Island, Michigan, Minnesota, Maine, Maryland
9
8District of Columbia, Wisconsin, Oregon
10
9New York
11
10Other
4
3
 Dependent Students
If student's State or territory of residence is—
The percentage is—Alaska, Texas, South Dakota, Wyoming, Washington, Tennessee, Nevada
0Florida, New Hampshire
1Connecticut, Louisiana, Illinois, North Dakota
2Mississippi, Arizona, Alabama, Pennsylvania, New Jersey, Missouri
3Nebraska, Indiana, Colorado, New Mexico, Oklahoma, Kansas, West Virginia, Rhode Island, Virginia, Georgia, Arkansas, Vermont, Michigan
4Montana, Idaho, Utah, Kentucky, Massachusetts, California, North Carolina, South Carolina, Ohio, Iowa, Delaware, Maine, Wisconsin
5Oregon, Maryland, Minnesota, Hawaii
6District of Columbia, New York
7Other
2
 Independent Students Without Dependents Other Than a Spouse
If student's State or territory of residence is—
The percentage is—Alaska, Texas, South Dakota, Wyoming, Washington, Tennessee, Nevada
0Florida, New Hampshire
1Connecticut, Louisiana, Illinois, North Dakota
2Mississippi, Arizona, Alabama, Pennsylvania, New Jersey, Missouri
3Nebraska, Indiana, Colorado, New Mexico, Oklahoma, Kansas, West Virginia, Rhode Island, Virginia, Georgia, Arkansas, Vermont, Michigan
4Montana, Idaho, Utah, Kentucky, Massachusetts, California, North Carolina, South Carolina, Ohio, Iowa, Delaware, Maine, Wisconsin
5Oregon, Maryland, Minnesota, Hawaii
6District of Columbia, New York
7Other
2
 Electronic Access to This Document You may view this document, as well as all other Department of Education documents published in the 
                    **Federal Register**
                    , in text or Adobe Portable Document Format (PDF) on the Internet at the following site:  www.ed.gov/​legislation/​FedRegister To use the PDF you must have Adobe Acrobat Reader, which is available free at this site. If you have questions about using the PDF, call the U.S. Government 
                    ( print page 29562)
                    Printing Office (GPO), toll free, at 1-888-293-6498; or in Washington, DC, area at (202) 512-1530. Note: The official version of this document is the document published in the 
                        **Federal Register**
                        . Free Internet access to the official edition of the 
                        **Federal Register**
                         and the Code of Federal Regulations is available on GPO Access at: http://www.access.gpo.gov/​nara/​index.html (Catalog of Federal Domestic Assistance Numbers: 84.007 Federal Supplemental Educational Opportunity Grant; 84.032 Federal Family Education Loan Program; 84.033 Federal Work-Study Program; 84.038 Federal Perkins Loan Program; 84.063 Federal Pell Grant Program; William D. Ford Federal Direct Loan Program, 84.268) Dated: May 25, 2001. Greg Woods, Chief Operating Officer, Student Financial Assistance.


[FR Doc. 01-13636 Filed 5-30-01; 8:45am] BILLING CODE 4000-01-P