Document headings vary by document type but may contain
                    the following: the agency or agencies that issued and signed a document
the number of the CFR title and the number of each part
                      the document amends, proposes to amend, or is directly
                      related to
the agency docket number / agency internal file number
the RIN which identifies each regulatory action listed in
                      the Unified Agenda of Federal Regulatory and Deregulatory
                      Actions See the
                    Document Drafting Handbook
                    for more details.
 Department of Education
 AGENCY: Federal Student Aid, U.S. Department of Education.
 ACTION: Notice of revision of the Federal Need Analysis Methodology for the 2011-2012 award year.
 SUMMARY: The Secretary 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 2011-2012 for the student financial aid programs authorized under title IV of the Higher Education Act of 1965, as amended (HEA). 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 programs include the Federal Pell Grant, Federal Perkins Loan, Federal Work-Study, Federal Supplemental Educational Opportunity Grant, William D. Ford Federal Direct Loan, and the Teach Grant Programs (Title IV, HEA Programs).
 FOR FURTHER INFORMATION CONTACT: Ms. Marya Dennis, Management and Program Analyst, U.S. Department of Education, room 63G2, Union Center Plaza, 830 First Street, NE., Washington, DC 20202-5454. Telephone: (202) 377-3385. If you use a telecommunications device for the deaf (TDD), call the Federal Relay Service (FRS), toll free, at 1-800-877-8339. Individuals with disabilities can obtain this document in an accessible format (
                        *e.g.,*
                         braille, large print, audiotape, or computer diskette) on request to the contact person listed under 
                        **FOR FURTHER INFORMATION CONTACT**
                        .


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 title IV 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 for general price inflation. The changes are based, in general, upon increases in the Consumer Price Index. For award year 2011-2012, the Secretary is charged with updating the income protection allowance for parents of dependent students, adjusted net worth of a business or farm, and the assessment schedules and rates to account for inflation that took place between December 2009 and December 2010. However, because the Secretary must publish these tables before December 2010, 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 (CPI-U) for 2010. The Secretary must also account for any misestimation of inflation for the prior year. In developing the table values for the 2010-2011 award year, the Secretary assumed a 4.1 percent increase in the CPI-U for the period December 2008 through December 2009. Actual inflation for this time period was 2.7 percent. The Secretary estimates that the increase in the CPI-U for the period December 2009 through December 2010 will be 1.2 percent. Last year's overestimate of inflation for 2009 (4.1 percent minus 2.7 percent) exceeds this year's estimate of inflation for 2010. However, the Secretary lacks statutory authority to reduce the table values in the need analysis formula. Thus, the income protection allowance for parents of dependent students, the adjusted net worth of a business or farm, and the assessment schedules and rates are unchanged from 2010-2011. 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 by updating the procedures for determining the income protection allowance for dependent students as well as the income protection allowance tables for both independent students with dependents other than a spouse and 
                    ( print page 29745)
                    independent students without dependents other than a spouse. As amended by the CCRAA, the HEA established new 2011-2012 award year values for these income protection allowances. The updated tables are in sections 1, 2, and 4 of this notice. The Secretary must also revise, for each award year, the education savings and asset protection allowances as provided for in section 478(d) of the HEA. The Education Savings and Asset Protection Allowance table for award year 2011-2012 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 upon increases in the Bureau of Labor Statistics budget of the marginal costs for a two-worker family compared to a one-worker family for food away from home, apparel, transportation, and household furnishings and operations. The Employment Expense Allowance table for award year 2011-2012 has been updated in section 5 of this notice. The HEA provides for the following annual updates: 1. 
                    *Income Protection Allowance (IPA).*
                     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 IPA for the dependent student is $5,250. The IPAs for parents of dependent students for award year 2011-2012 are: Parents of Dependent Students
Number in collegeFamily size
1
2
3
4
52
$16,230
$13,4503
20,210
17,450
$14,6704
24,970
22,190
19,430
$16,6505
29,460
26,680
23,920
21,140
$18,3806
34,460
31,680
28,920
26,140
23,380
 For each additional family member add $3,890. For each additional college student subtract $2,760. The IPAs for independent students with dependents other than a spouse for award year 2011-12 are: Independent Students With Dependents Other Than a Spouse
Number in collegeFamily size
1
2
3
4
52
$21,660
$17,9603
26,960
23,280
$19,5804
33,300
29,600
25,920
$22,2105
39,300
35,590
31,900
28,200
$24,5206
45,950
42,250
38,580
34,860
31,190
 For each additional family member add $5,180. For each additional college student subtract $3,690. The IPAs for single independent students and independent students without dependents other than a spouse for award year 2011-12 are: Marital status
Number in college
IPASingle
1
$8,550Married
2
8,550Married
1
13,710
 2. 
                    *Adjusted Net Worth (NW) of a Business or Farm.*
                     A portion of the full net value of a business or farm is excluded from the calculation of an expected contribution 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, independent students 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 (NW) is—Less than $1
$0.$1 to $115,000
$0 + 40% of NW.$115,001 to $345,000
$46,000 + 50% of NW over $115,000.$345,001 to $580,000
$161,000 + 60% of NW over $345,000.$580,001 or more
$302,000 + 100% of NW over $580,000.
 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.
                    ( print page 29746) Dependent Students
And they areMarried
SingleIf the age of the older parent is
Then the education savings and asset protection allowance is—25 or less
0
026
2,500
90027
5,100
1,80028
7,600
2,70029
10,200
3,50030
12,700
4,40031
15,300
5,30032
17,800
6,20033
20,400
7,10034
22,900
8,00035
25,500
8,90036
28,000
9,80037
30,600
10,60038
33,100
11,50039
35,700
12,40040
38,200
13,30041
38,900
13,60042
39,900
13,90043
40,900
14,20044
41,900
14,50045
42,900
14,90046
44,000
15,20047
45,100
15,50048
46,200
15,90049
47,400
16,30050
48,800
16,70051
50,000
17,10052
51,200
17,50053
52,800
18,00054
54,300
18,40055
55,600
18,80056
57,300
19,30057
58,700
19,80058
60,400
20,30059
62,200
20,80060
64,000
21,40061
65,800
22,00062
67,700
22,60063
70,000
23,20064
72,000
23,80065 or older
74,000
24,500
 Independent Students Without Dependents Other Than a Spouse
And they areMarried
SingleIf the age of the student is
Then the education savings and asset protection allowance is—25 or less
0
026
2,500
90027
5,100
1,80028
7,600
2,70029
10,200
3,50030
12,700
4,40031
15,300
5,30032
17,800
6,20033
20,400
7,10034
22,900
8,00035
25,500
8,90036
28,000
9,80037
30,600
10,60038
33,100
11,50039
35,700
12,40040
38,200
13,30041
38,900
13,60042
39,900
13,900( print page 29747)43
40,900
14,20044
41,900
14,50045
42,900
14,90046
44,000
15,20047
45,100
15,50048
46,200
15,90049
47,400
16,30050
48,800
16,70051
50,000
17,10052
51,200
17,50053
52,800
18,00054
54,300
18,40055
55,600
18,80056
57,300
19,30057
58,700
19,80058
60,400
20,30059
62,200
20,80060
64,000
21,40061
65,800
22,00062
67,700
22,60063
70,000
23,20064
72,000
23,80065 or older
74,000
24,500
 Independent Students With Dependents Other Than a Spouse
And they areMarried
SingleIf the age of the student is
Then the education savings and asset protection allowance is—25 or less
0
026
2,500
90027
5,100
1,80028
7,600
2,70029
10,200
3,50030
12,700
4,40031
15,300
5,30032
17,800
6,20033
20,400
7,10034
22,900
8,00035
25,500
8,90036
28,000
9,80037
30,600
10,60038
33,100
11,50039
35,700
12,40040
38,200
13,30041
38,900
13,60042
39,900
13,90043
40,900
14,20044
41,900
14,50045
42,900
14,90046
44,000
15,20047
45,100
15,50048
46,200
15,90049
47,400
16,30050
48,800
16,70051
50,000
17,10052
51,200
17,50053
52,800
18,00054
54,300
18,40055
55,600
18,80056
57,300
19,30057
58,700
19,80058
60,400
20,30059
62,200
20,800( print page 29748)60
64,000
21,40061
65,800
22,00062
67,700
22,60063
70,000
23,20064
72,000
23,80065 or older
74,000
24,500
 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 toward educational expenses from family financial resources. For dependent students, the EFC is derived 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 parents' contribution for a dependent student is computed according to the following schedule: If AAI is—
Then the contribution is—Less than −$3,409
−$750.($3,409) to $14,500
22% of AAI.$14,501 to $18,200
$3,190 + 25% of AAI over $14,500.$18,201 to $21,900
$4,115 + 29% of AAI over $18,200.$21,901 to $25,600
$5,188 + 34% of AAI over $21,900.$25,601 to $29,300
$6,446 + 40% of AAI over $25,600.$29,301 or more
$7,926 + 47% of AAI over $29,300.
 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
−$750.($3,409) to $14,500
22% of AAI.$14,501 to $18,200
$3,190 + 25% of AAI over $14,500.$18,201 to $21,900
$4,115 + 29% of AAI over $18,200.$21,901 to $25,600
$5,188 + 34% of AAI over $21,900.$25,601 to $29,300
$6,446 + 40% of AAI over $25,600.$29,301 or more
$7,926 + 47% of AAI over $29,300.
 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 upon the marginal differences in costs for a two-worker family compared to a one-worker family for 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 $3,500 or 35 percent of earned income. 6. 
                    *Allowance for State and Other Taxes.*
                     The allowance for State and other taxes protects a portion of the parents' and students' income 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. 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. State
Parents of dependents and independents with
                             dependents other than a spouse
Dependents and
                             independents without dependents other than a spouseUnder $15,000
                             (in percent)
$15,000 & Up
                             (in percent)
All
                             (in percent)Alabama
3
2
2( print page 29749)Alaska
2
1
0Arizona
5
4
3Arkansas
4
3
3California
8
7
5Colorado
5
4
3Connecticut
7
6
4Delaware
5
4
3District of Columbia
7
6
6Florida
4
3
1Georgia
6
5
4Hawaii
4
3
4Idaho
5
4
4Illinois
6
5
2Indiana
4
3
3Iowa
5
4
3Kansas
5
4
3Kentucky
5
4
4Louisiana
3
2
2Maine
6
5
4Maryland
8
7
6Massachusetts
6
5
4Michigan
5
4
3Minnesota
6
5
4Mississippi
3
2
2Missouri
5
4
3Montana
5
4
3Nebraska
5
4
3Nevada
4
3
1New Hampshire
5
4
1New Jersey
10
9
5New Mexico
3
2
2New York
9
8
6North Carolina
6
5
4North Dakota
3
2
1Ohio
6
5
4Oklahoma
4
3
3Oregon
8
7
5Pennsylvania
5
4
3Rhode Island
7
6
4South Carolina
5
4
3South Dakota
2
1
1Tennessee
2
1
1Texas
3
2
1Utah
5
4
4Vermont
6
5
3Virginia
6
5
4Washington
4
3
1West Virginia
3
2
2Wisconsin
7
6
4Wyoming
2
1
1Other
3
2
2
 *Electronic Access to This Document:*
                     You can view this document, as well as all other documents of this Department published in the 
                    **Federal Register**
                    , in text or Adobe Portable Document Format (PDF) on the Internet at the following site: 
                    *http://www.ed.gov/​news/​fedregister*. To use PDF you must have Adobe Acrobat Reader, which is available free at this site. 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.gpoaccess.gov/​nara/​index.html.* (Catalog of Federal Domestic Assistance Numbers: 84.063 Federal Pell Grant Program; 84.038 Federal Perkins Loan Program; 84.033 Federal Work-Study Programs; 84.007 Federal Supplemental Educational Opportunity Grant Program; 84.268 William D. Ford Federal Direct Loan Program; 84.379 TEACH Grant Program) Program Authority:
                    20 U.S.C. 1087rr. Dated: May 24, 2010. William J. Taggart, Chief Operating Officer, Federal Student Aid.


[FR Doc. 2010-12799 Filed 5-26-10; 8:45 am] BILLING CODE 4000-01-P