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NASFAA
1101 Connecticut Avenue, NW,
Suite 1100
Washington, DC 20036-4303
Phone: 202-785-0453
Fax: 202-785-1487
Web@NASFAA.org
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Federal Register: May 29, 2008
Volume 73, Number 104
[Notices]
[Page 30904-30908]
[PDF version of document]
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 2009-2010 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
2009-2010 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, 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
alternative format (e.g., Braille, large print, audiotape or compact
disk) 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 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 to adjust for general price inflation. The changes are
based, in general, upon increases in the Consumer Price Index.
For award year 2009-2010 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 2007 and
December
[[Page 30905]]
2008. However, because the Secretary must publish these tables before
December 2008, 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 2008. The Secretary estimates
that the increase in the Consumer Price Index for All Urban Consumers
(CPI-U) for the period December 2007 through December 2008 will be 1.7
percent. Additionally, the College Cost Reduction and Access Act
(CCRAA, Pub. L. 110-84) modified the updating procedure for the income
protection allowance for dependent students and the income protection
allowance tables for both independent students with dependents other
than a spouse and independent students without dependents other than a
spouse. CCRAA established new 2009-2010 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 2009-2010 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 2009-2010 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 $3,750. The income protection allowances for parents of dependent
students for award year 2009-2010 are:
Parents of dependent students
-----------------------------------------------------------
Family size Number in college
-----------------------------------------------------------
1 2 3 4 5
2................................................... $15,840 $13,130 .......... .......... ..........
3................................................... 19,730 17,030 $14,320 .......... ..........
4................................................... 24,370 21,660 18,960 $16,250
5................................................... 28,750 26,040 23,340 20,630 $17,940
6................................................... 33,630 30,920 28,220 25,510 22,820
For each additional family member, add $3,800.
For each additional college student, subtract $2,700.
The income protection allowances for independent students with
dependents other than a spouse for award year 2009-10 are:
Independent students with dependents other than a spouse
-----------------------------------------------------------
Family size Number in college
-----------------------------------------------------------
1 2 3 4 5
2................................................... $17,720 $14,690 .......... .......... ..........
3................................................... 22,060 19,050 $16,020 .......... ..........
4................................................... 27,250 24,220 21,210 $18,170 ..........
5................................................... 32,150 29,120 26,100 23,070 $20,060
6................................................... 37,600 34,570 31,570 28,520 25,520
For each additional family member, add $4,240.
For each additional college student, subtract $3,020.
The income protection allowances for single independent students
and independent students without dependents other than a spouse for
award year 2009-10 are:
Number in
Marital status college IPA
Single.......................................... 1 $7,000
Married......................................... 2 7,000
Married......................................... 1 11,220
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 is--
Less than $1................................. $0
$1 to $115,000............................... $0 + 40% of NW
$115,001 to $340,000......................... $46,000 + 50% of NW over $115,000
$340,001 to $565,000......................... $158,500 + 60% of NW over $340,000
[[Page 30906]]
$565,001 or more............................. $293,500 + 100% of NW over $565,000
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................................................ 2,900 1,200
27................................................ 5,800 2,400
28................................................ 8,700 3,600
29................................................ 11,600 4,800
30................................................ 14,500 6,000
31................................................ 17,400 7,200
32................................................ 20,300 8,400
33................................................ 23,100 9,500
34................................................ 26,000 10,700
35................................................ 28,900 11,900
36................................................ 31,800 13,100
37................................................ 34,700 14,300
38................................................ 37,600 15,500
39................................................ 40,500 16,700
40................................................ 43,400 17,900
41................................................ 44,200 18,200
42................................................ 45,300 18,600
43................................................ 46,400 19,100
44................................................ 47,600 19,500
45................................................ 48,700 19,900
46................................................ 49,900 20,400
47................................................ 51,200 20,900
48................................................ 52,400 21,400
49................................................ 53,700 21,900
50................................................ 55,300 22,400
51................................................ 56,700 22,900
52................................................ 58,000 23,500
53................................................ 59,800 24,000
54................................................ 61,200 24,600
55................................................ 63,000 25,300
56................................................ 64,900 25,900
57................................................ 66,400 26,500
58................................................ 68,300 27,200
59................................................ 70,300 27,900
60................................................ 72,300 28,700
61................................................ 74,400 29,500
62................................................ 76,600 30,300
63................................................ 79,100 31,100
64................................................ 81,300 32,000
65 or older....................................... 84,000 32,800
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................................................ 2,900 1,200
27................................................ 5,800 2,400
28................................................ 8,700 3,600
29................................................ 11,600 4,800
30................................................ 14,500 6,000
31................................................ 17,400 7,200
32................................................ 20,300 8,400
33................................................ 23,100 9,500
34................................................ 26,000 10,700
35................................................ 28,900 11,900
36................................................ 31,800 13,100
37................................................ 34,700 14,300
38................................................ 37,600 15,500
39................................................ 40,500 16,700
40................................................ 43,400 17,900
41................................................ 44,200 18,200
42................................................ 45,300 18,600
43................................................ 46,400 19,100
44................................................ 47,600 19,500
45................................................ 48,700 19,900
46................................................ 49,900 20,400
47................................................ 51,200 20,900
48................................................ 52,400 21,400
49................................................ 53,700 21,900
50................................................ 55,300 22,400
51................................................ 56,700 22,900
52................................................ 58,000 23,500
53................................................ 59,800 24,000
54................................................ 61,200 24,600
55................................................ 63,000 25,300
56................................................ 64,900 25,900
57................................................ 66,400 26,500
58................................................ 68,300 27,200
59................................................ 70,300 27,900
60................................................ 72,300 28,700
61................................................ 74,400 29,500
62................................................ 76,600 30,300
63................................................ 79,100 31,100
64................................................ 81,300 32,000
65 or older....................................... 84,000 32,800
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................................................ 2,900 1,200
27................................................ 5,800 2,400
28................................................ 8,700 3,600
29................................................ 11,600 4,800
30................................................ 14,500 6,000
31................................................ 17,400 7,200
32................................................ 20,300 8,400
33................................................ 23,100 9,500
34................................................ 26,000 10,700
35................................................ 28,900 11,900
36................................................ 31,800 13,100
37................................................ 34,700 14,300
38................................................ 37,600 15,500
39................................................ 40,500 16,700
40................................................ 43,400 17,900
41................................................ 44,200 18,200
42................................................ 45,300 18,600
43................................................ 46,400 19,100
44................................................ 47,600 19,500
45................................................ 48,700 19,900
46................................................ 49,900 20,400
47................................................ 51,200 20,900
48................................................ 52,400 21,400
49................................................ 53,700 21,900
50................................................ 55,300 22,400
51................................................ 56,700 22,900
52................................................ 58,000 23,500
53................................................ 59,800 24,000
54................................................ 61,200 24,600
55................................................ 63,000 25,300
56................................................ 64,900 25,900
57................................................ 66,400 26,500
58................................................ 68,300 27,200
59................................................ 70,300 27,900
60................................................ 72,300 28,700
61................................................ 74,400 29,500
62................................................ 76,600 30,300
63................................................ 79,100 31,100
64................................................ 81,300 32,000
65 or older....................................... 84,000 32,800
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.
[[Page 30907]]
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 $14,200......... 22% of AAI
$14,201 to $17,800.......... $3,124 + 25% of AAI over $14,200
$17,801 to $21,400.......... $4,024 + 29% of AAI over $17,800
$21,401 to $25,000.......... $5,068 + 34% of AAI over $21,400
$25,001 to $28,600.......... $6,292 + 40% of AAI over $25,000
$28,601 or more............. $7,732 + 47% of AAI over $28,600
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 $14,200......... 22% of AAI
$14,201 to $17,800.......... $3,124 + 25% of AAI over $14,200
$17,801 to $21,400.......... $4,024 + 29% of AAI over $17,800
$21,401 to $25,000.......... $5,068 + 34% of AAI over $21,400
$25,001 to $28,600.......... $6,292 + 40% of AAI over $25,000
$28,601 or more............. $7,732 + 47% of AAI over $28,600
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 other independents
than a spouse without
State ------------------------------------ dependents 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................................................ 8 7 5
Colorado.................................................. 5 4 3
Connecticut............................................... 8 7 4
Delaware.................................................. 4 3 3
District of Columbia...................................... 7 6 6
Florida................................................... 3 2 1
Georgia................................................... 5 4 4
Hawaii.................................................... 5 4 4
Idaho..................................................... 5 4 3
Illinois.................................................. 5 4 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
[[Page 30908]]
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 3
New York.................................................. 9 8 6
North Carolina............................................ 6 5 4
North Dakota.............................................. 3 2 1
Ohio...................................................... 6 5 4
Oklahoma.................................................. 4 3 3
Oregon.................................................... 7 6 5
Pennsylvania.............................................. 6 5 3
Rhode Island.............................................. 7 6 4
South Carolina............................................ 5 4 3
South Dakota.............................................. 2 1 1
Tennessee................................................. 2 1 1
Texas..................................................... 3 2 1
Utah...................................................... 5 4 4
Vermont................................................... 5 4 3
Virginia.................................................. 6 5 4
Washington................................................ 4 3 1
West Virginia............................................. 3 2 2
Wisconsin................................................. 7 6 4
Wyoming................................................... 2 1 1
Other..................................................... 3 2 2
You may 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. If you have questions about using PDF, call the U.S.
Government Printing Office (GPO), toll free, at 1-888-293-6498; or in
the 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.gpoaccess.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;
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 22, 2008.
Lawrence A. Warder,
Acting Chief Operating Officer, Federal Student Aid.
[FR Doc. E8-11953 Filed 5-28-08; 8:45 am]
BILLING CODE 4000-01-P
Posted 05/29/08 to www.NASFAA.org. Please submit Web Site questions or comments to Web@NASFAA.org
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