[Federal Register Volume 74, Number 104 (Tuesday, June 2, 2009)]
[Notices]
[Pages 26379-26383]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-12668]


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DEPARTMENT OF EDUCATION


Federal Pell Grant, Academic Competitiveness Grant, National 
Science and Mathematics Access To Retain Talent Grant, Federal Perkins 
Loan, Federal Work-Study, Federal Supplemental Educational Opportunity 
Grant, Federal Family Education Loan, and William D. Ford Federal 
Direct Loan Programs

AGENCY: Federal Student Aid, U.S. Department of Education.

ACTION: Notice of revision of the Federal Need Analysis Methodology for 
the 2010-2011 award year.

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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 
2010-2011 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, Academic Competitiveness 
Grant, National Science and Mathematics Access to Retain Talent Grant, 
Federal Perkins Loan, Federal Work-Study, Federal Supplemental 
Educational Opportunity Grant, Federal Family Education Loan, and 
William D. Ford Federal Direct Loan Programs (Title IV, HEA Programs).

FOR FURTHER INFORMATION CONTACT: Ms. Marya Dennis, Management and 
Program Analyst, U.S. Department of Education, 63G2, Union Center 
Plaza, 830 First Street, NE., Washington, DC 20202. 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 compact 
disk) 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 2010-2011 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 2008 and 
December 2009. However, because the Secretary must publish these tables 
before December 2009, 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 2009. The Secretary estimates 
that the increase in the Consumer Price Index for All Urban Consumers 
(CPI-U) for the period December 2008 through December 2009 will be 4.1 
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 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 independent students without 
dependents other than a spouse. As amended by the CCRAA, the HEA 
established new 2010-2011 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 2010-2011 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 2010-2011 has been 
updated 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 $4,500. The income protection allowances for parents of dependent 
students for award year 2010-2011 are:

[[Page 26380]]



                                          Parents of Dependent Students
                                               [Number in college]
----------------------------------------------------------------------------------------------------------------
           Family Size                   1               2               3               4               5
----------------------------------------------------------------------------------------------------------------
2...............................         $16,230         $13,450  ..............  ..............  ..............
3...............................          20,210          17,450         $14,670  ..............  ..............
4...............................          24,970          22,190          19,430         $16,650  ..............
5...............................          29,460          26,680          23,920          21,140         $18,380
6...............................          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 income protection allowances (IPA) for independent students 
with dependents other than a spouse for award year 2010-11 are:

                            Independent Students With Dependents Other Than a Spouse
                                               [Number in college]
----------------------------------------------------------------------------------------------------------------
           Family size                   1               2               3               4               5
----------------------------------------------------------------------------------------------------------------
2...............................         $19,690         $16,330  ..............  ..............  ..............
3...............................          24,510          21,160         $17,800  ..............  ..............
4...............................          30,280          26,910          23,560         $20,190  ..............
5...............................          35,730          32,350          29,000          25,640         $22,290
6...............................          41,780          38,410          35,080          31,690          28,350
----------------------------------------------------------------------------------------------------------------

For each additional family member add $4,710.
For each additional college student subtract $3,350.
    The income protection allowances for single independent students 
and independent students without dependents other than a spouse for 
award year 2010-11 are:

------------------------------------------------------------------------
                                             Number in
             Marital status                   college           IPA
------------------------------------------------------------------------
Single..................................               1          $7,780
Married.................................               2           7,780
Married.................................               1          12,460
------------------------------------------------------------------------

    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  Then the adjusted net worth is--
                  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.

                           Dependent Students
------------------------------------------------------------------------
                                                      And they are
       If the age of the older parent is       -------------------------
                                                  Married       Single
------------------------------------------------------------------------
                                                   Then the education
                                                    savings and asset
                                                protection allowance is--
 
------------------------------------------------------------------------
25 or less....................................            0            0
26............................................        2,800        1,100
27............................................        5,500        2,200
28............................................        8,300        3,300
29............................................       11,100        4,400
30............................................       13,800        5,500
31............................................       16,600        6,600
32............................................       19,400        7,700
33............................................       22,100        8,700
34............................................       24,900        9,800
35............................................       27,700       10,900
36............................................       30,400       12,000
37............................................       33,200       13,100
38............................................       36,000       14,200
39............................................       38,700       15,300
40............................................       41,500       16,400
41............................................       42,200       16,700
42............................................       43,300       17,100
43............................................       44,400       17,500
44............................................       45,500       17,900
45............................................       46,600       18,300
46............................................       47,700       18,700
47............................................       48,900       19,100
48............................................       50,100       19,600

[[Page 26381]]

 
49............................................       51,300       20,100
50............................................       52,900       20,500
51............................................       54,200       21,000
52............................................       55,500       21,500
53............................................       57,100       22,000
54............................................       58,500       22,600
55............................................       60,200       23,200
56............................................       62,000       23,700
57............................................       63,500       24,300
58............................................       65,300       25,000
59............................................       67,200       25,600
60............................................       69,200       26,300
61............................................       71,200       27,000
62............................................       73,200       27,800
63............................................       75,600       28,500
64............................................       77,700       29,300
65 or older...................................       80,300       30,100
------------------------------------------------------------------------


       Independent Students Without Dependents Other Than a Spouse
------------------------------------------------------------------------
                                                      And they are
         If the age of the student is          -------------------------
                                                  Married       Single
------------------------------------------------------------------------
                                                   Then the education
                                                    savings and asset
                                                protection allowance is--
 
------------------------------------------------------------------------
25 or less....................................            0            0
26............................................        2,800        1,100
27............................................        5,500        2,200
28............................................        8,300        3,300
29............................................       11,100        4,400
30............................................       13,800        5,500
31............................................       16,600        6,600
32............................................       19,400        7,700
33............................................       22,100        8,700
34............................................       24,900        9,800
35............................................       27,700       10,900
36............................................       30,400       12,000
37............................................       33,200       13,100
38............................................       36,000       14,200
39............................................       38,700       15,300
40............................................       41,500       16,400
41............................................       42,200       16,700
42............................................       43,300       17,100
43............................................       44,400       17,500
44............................................       45,500       17,900
45............................................       46,600       18,300
46............................................       47,700       18,700
47............................................       48,900       19,100
48............................................       50,100       19,600
49............................................       51,300       20,100
50............................................       52,900       20,500
51............................................       54,200       21,000
52............................................       55,500       21,500
53............................................       57,100       22,000
54............................................       58,500       22,600
55............................................       60,200       23,200
56............................................       62,000       23,700
57............................................       63,500       24,300
58............................................       65,300       25,000
59............................................       67,200       25,600
60............................................       69,200       26,300
61............................................       71,200       27,000
62............................................       73,200       27,800
63............................................       75,600       28,500
64............................................       77,700       29,300
65 or older...................................       80,300       30,100
------------------------------------------------------------------------


        Independent Students With Dependents Other Than a Spouse
------------------------------------------------------------------------
                                                      And they are
         If the age of the student is          -------------------------
                                                  Married       Single
------------------------------------------------------------------------
                                                   Then the education
                                                    savings and asset
                                                protection allowance is--
 
------------------------------------------------------------------------
25 or less....................................            0            0
26............................................        2,800        1,100
27............................................        5,500        2,200
28............................................        8,300        3,300
29............................................       11,100        4,400
30............................................       13,800        5,500
31............................................       16,600        6,600
32............................................       19,400        7,700
33............................................       22,100        8,700
34............................................       24,900        9,800
35............................................       27,700       10,900
36............................................       30,400       12,000
37............................................       33,200       13,100
38............................................       36,000       14,200
39............................................       38,700       15,300
40............................................       41,500       16,400
41............................................       42,200       16,700
42............................................       43,300       17,100
43............................................       44,400       17,500
44............................................       45,500       17,900
45............................................       46,600       18,300
46............................................       47,700       18,700
47............................................       48,900       19,100
48............................................       50,100       19,600
49............................................       51,300       20,100
50............................................       52,900       20,500
51............................................       54,200       21,000
52............................................       55,500       21,500
53............................................       57,100       22,000
54............................................       58,500       22,600
55............................................       60,200       23,200
56............................................       62,000       23,700
57............................................       63,500       24,300
58............................................       65,300       25,000
59............................................       67,200       25,600
60............................................       69,200       26,300
61............................................       71,200       27,000
62............................................       73,200       27,800
63............................................       75,600       28,500
64............................................       77,700       29,300
65 or older...................................       80,300       30,100
------------------------------------------------------------------------

    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.

[[Page 26382]]

 
($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.

----------------------------------------------------------------------------------------------------------------
                                                                     Parents of dependents and    Dependents and
                                                                   independents with dependents    independents
                                                                        other than a spouse           without
                                                                 --------------------------------   dependents
                              State                                                                other than a
                                                                                                      spouse
                                                                   Under $15,000   $15,000 & up  ---------------
                                                                                                        All
----------------------------------------------------------------------------------------------------------------
Alabama.........................................................              3%              2%              2%
Alaska..........................................................              2%              1%              0%
Arizona.........................................................              4%              3%              3%
Arkansas........................................................              4%              3%              3%
California......................................................              9%              8%              5%
Colorado........................................................              5%              4%              3%
Connecticut.....................................................              8%              7%              4%
Delaware........................................................              5%              4%              3%
District of Columbia............................................              7%              6%              6%
Florida.........................................................              4%              3%              1%
Georgia.........................................................              5%              4%              4%
Hawaii..........................................................              5%              4%              4%
Idaho...........................................................              5%              4%              4%
Illinois........................................................              6%              5%              2%
Indiana.........................................................              4%              3%              3%
Iowa............................................................              5%              4%              3%
Kansas..........................................................              5%              4%              3%
Kentucky........................................................              5%              4%              4%
Louisiana.......................................................              3%              2%              2%
Maine...........................................................              6%              5%              4%
Maryland........................................................              8%              7%              5%
Massachusetts...................................................              7%              6%              4%
Michigan........................................................              5%              4%              3%
Minnesota.......................................................              6%              5%              4%
Mississippi.....................................................              3%              2%              2%
Missouri........................................................              5%              4%              3%
Montana.........................................................              5%              4%              3%
Nebraska........................................................              5%              4%              3%
Nevada..........................................................              3%              2%              1%
New Hampshire...................................................              5%              4%              1%
New Jersey......................................................              9%              8%              4%
New Mexico......................................................              3%              2%              2%
New York........................................................             10%              9%              6%
North Carolina..................................................              6%              5%              4%
North Dakota....................................................              3%              2%              1%
Ohio............................................................              6%              5%              4%
Oklahoma........................................................              4%              3%              3%
Oregon..........................................................              7%              6%              5%
Pennsylvania....................................................              5%              4%              3%
Rhode Island....................................................              7%              6%              4%
South Carolina..................................................              5%              4%              3%
South Dakota....................................................              2%              1%              1%

[[Page 26383]]

 
Tennessee.......................................................              2%              1%              1%
Texas...........................................................              3%              2%              1%
Utah............................................................              5%              4%              4%
Vermont.........................................................              6%              5%              3%
Virginia........................................................              7%              6%              4%
Washington......................................................              3%              2%              1%
West Virginia...................................................              3%              2%              2%
Wisconsin.......................................................              7%              6%              4%
Wyoming.........................................................              2%              1%              1%
Other...........................................................              3%              2%              2%
----------------------------------------------------------------------------------------------------------------

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(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; 
84.268 William D. Ford Federal Direct Loan Program; 84.375 Academic 
Competitiveness Grant; 84.376 National Science and Mathematics 
Access to Retain Talent Grant)

    Program Authority:  20 U.S.C. 1087rr.

    Dated: May 27, 2009.
James F. Manning,
Acting Chief Operating Officer Federal Student Aid.
[FR Doc. E9-12668 Filed 6-1-09; 8:45 am]
BILLING CODE 4000-01-P