75 FR 102 pgs. 29744-29749 - Federal Pell Grant, Federal Perkins Loan, Federal Work-Study, Federal Supplemental Educational Opportunity Grant, William D. Ford Federal Direct Loan, and TEACH Grant Programs

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Type: NOTICEVolume: 75Number: 102Pages: 29744 - 29749

FR document: [FR Doc. 2010-12799 Filed 5-26-10; 8:45 am]

Agency: Education Department

Official PDF Version: PDF Version

DEPARTMENT OF EDUCATION

Federal Pell Grant, Federal Perkins Loan, Federal Work-Study, Federal Supplemental Educational Opportunity Grant, William D. Ford Federal Direct Loan, and TEACH Grant Programs

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 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:

Number in college	Family size	1	2	3	4
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 IPAs for independent students with dependents other than a spouse for award year 2011-12 are:

Number in college	Family size	1	2	3	4
2	$21,660	$17,960
3	26,960	23,280	$19,580
4	33,300	29,600	25,920	$22,210
5	39,300	35,590	31,900	28,200	$24,520
6	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	IPA
Single	1	$8,550
Married	2	8,550
Married	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.

	And they are	Married
If the age of the older parent is	Then the education savings and asset protection allowance is-
25 or less	0	0
26	2,500	900
27	5,100	1,800
28	7,600	2,700
29	10,200	3,500
30	12,700	4,400
31	15,300	5,300
32	17,800	6,200
33	20,400	7,100
34	22,900	8,000
35	25,500	8,900
36	28,000	9,800
37	30,600	10,600
38	33,100	11,500
39	35,700	12,400
40	38,200	13,300
41	38,900	13,600
42	39,900	13,900
43	40,900	14,200
44	41,900	14,500
45	42,900	14,900
46	44,000	15,200
47	45,100	15,500
48	46,200	15,900
49	47,400	16,300
50	48,800	16,700
51	50,000	17,100
52	51,200	17,500
53	52,800	18,000
54	54,300	18,400
55	55,600	18,800
56	57,300	19,300
57	58,700	19,800
58	60,400	20,300
59	62,200	20,800
60	64,000	21,400
61	65,800	22,000
62	67,700	22,600
63	70,000	23,200
64	72,000	23,800
65 or older	74,000	24,500

	And they are	Married
If the age of the student is	Then the education savings and asset protection allowance is-
25 or less	0	0
26	2,500	900
27	5,100	1,800
28	7,600	2,700
29	10,200	3,500
30	12,700	4,400
31	15,300	5,300
32	17,800	6,200
33	20,400	7,100
34	22,900	8,000
35	25,500	8,900
36	28,000	9,800
37	30,600	10,600
38	33,100	11,500
39	35,700	12,400
40	38,200	13,300
41	38,900	13,600
42	39,900	13,900
43	40,900	14,200
44	41,900	14,500
45	42,900	14,900
46	44,000	15,200
47	45,100	15,500
48	46,200	15,900
49	47,400	16,300
50	48,800	16,700
51	50,000	17,100
52	51,200	17,500
53	52,800	18,000
54	54,300	18,400
55	55,600	18,800
56	57,300	19,300
57	58,700	19,800
58	60,400	20,300
59	62,200	20,800
60	64,000	21,400
61	65,800	22,000
62	67,700	22,600
63	70,000	23,200
64	72,000	23,800
65 or older	74,000	24,500

	And they are	Married
If the age of the student is	Then the education savings and asset protection allowance is-
25 or less	0	0
26	2,500	900
27	5,100	1,800
28	7,600	2,700
29	10,200	3,500
30	12,700	4,400
31	15,300	5,300
32	17,800	6,200
33	20,400	7,100
34	22,900	8,000
35	25,500	8,900
36	28,000	9,800
37	30,600	10,600
38	33,100	11,500
39	35,700	12,400
40	38,200	13,300
41	38,900	13,600
42	39,900	13,900
43	40,900	14,200
44	41,900	14,500
45	42,900	14,900
46	44,000	15,200
47	45,100	15,500
48	46,200	15,900
49	47,400	16,300
50	48,800	16,700
51	50,000	17,100
52	51,200	17,500
53	52,800	18,000
54	54,300	18,400
55	55,600	18,800
56	57,300	19,300
57	58,700	19,800
58	60,400	20,300
59	62,200	20,800
60	64,000	21,400
61	65,800	22,000
62	67,700	22,600
63	70,000	23,200
64	72,000	23,800
65 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	Under $15,000 (in percent)	$15,000 & Up (in percent)
Alabama	3	2	2
Alaska	2	1	0
Arizona	5	4	3
Arkansas	4	3	3
California	8	7	5
Colorado	5	4	3
Connecticut	7	6	4
Delaware	5	4	3
District of Columbia	7	6	6
Florida	4	3	1
Georgia	6	5	4
Hawaii	4	3	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	6
Massachusetts	6	5	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	4	3	1
New Hampshire	5	4	1
New Jersey	10	9	5
New Mexico	3	2	2
New York	9	8	6
North Carolina	6	5	4
North Dakota	3	2	1
Ohio	6	5	4
Oklahoma	4	3	3
Oregon	8	7	5
Pennsylvania	5	4	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	6	5	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

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]

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