[Federal Register Volume 59, Number 94 (Tuesday, May 17, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-11881]
[[Page Unknown]]
[Federal Register: May 17, 1994]
_______________________________________________________________________
Part IV
Department of Education
_______________________________________________________________________
Federal Pell Grant, Federal Perkins Loan, Federal Work-Study, Federal
Supplemental Educational Opportunity Grant, Federal Stafford Loan, and
Federal Direct Student Loan Programs; Notice
DEPARTMENT OF EDUCATION
Federal Pell Grant, Federal Perkins Loan, Federal Work-Study,
Federal Supplemental Educational Opportunity Grant, Federal Stafford
Loan, and Federal Direct Student Loan Programs
AGENCY: Department of Education.
ACTION: Notice--Revision of the need analysis methodology for the 1995-
96 Award Year.
-----------------------------------------------------------------------
SUMMARY: The Secretary of Education announces the annual update to the
tables used in the need analysis methodology that an institution of
higher education must use in calculating expected family contributions
for the 1995-96 award year under the Federal Pell Grant, campus-based
(Federal Perkins Loan, Federal Work-Study, and Federal Supplemental
Educational Opportunity Grant), Federal Stafford Loan and Federal
Direct Student Loan programs. The Secretary takes this action under the
authority of Title IV of the Higher Education Act of 1965, as amended
(HEA).
FOR FURTHER INFORMATION CONTACT: Ms. Edith Bell, Program Specialist,
General Provisions Branch, Policy Development Division, U.S. Department
of Education, 400 Maryland Avenue, SW. (Room 4318, ROB-3), Washington,
DC 20202-5444, telephone (202) 708-7888. Individuals who use a
telecommunications device for the deaf (TDD) may call the Federal
Information Relay Service (FIRS) at 1-800-877-8339 between 8 a.m. and 8
p.m., Eastern time, Monday through Friday.
SUPPLEMENTARY INFORMATION: The need analysis methodology is used to
determine student eligibility for assistance under Title IV of the HEA.
This methodology, referred to as the Federal Needs Analysis
Methodology, is used to calculate the expected family contribution
(EFC) for the Federal Pell Grant, the campus-based (Federal Perkins
Loan, Federal Work-Study, and Federal Supplemental Educational
Opportunity Grant), Federal Stafford Loan, and Federal Direct Student
Loan programs. This methodology is established by statute.
Federal Needs Analysis Methodology
Part F of Title IV of the HEA specifies the criteria, data
elements, calculations, and tables for the computation of expected
family contributions for the Federal Pell Grant, campus-based, Federal
Stafford Loan, and Federal Direct Student Loan programs. In addition,
section 478 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 for the 12 months between December 31 of the previous year
and December 31 of the current year. The changes are based, in general,
upon increases in the Consumer Price Index.
For the award year 1995-96, the Secretary is charged with updating
the income protection allowances, adjusted net worth of a business or
farm, and the assessment schedules and rates to account for inflation
that took place between December 1993 and December 1994. However, since
the Secretary must publish these tables before December 1994, 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 1993. The Secretary estimates that the increase in the
Consumer Price Index for all Urban Consumers for the period December
1993 through December 1994 will be 3.0 percent. The updated tables for
the 1995-96 award year are set forth in sections 1, 2, and 4.
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 1995-96 has been updated below in section 3.
Section 477(b)(5) 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.
The HEA provides for the following annual updates:
1. Income Protection Allowance
This allowance is the amount of reasonable living expenses that
would be associated with the maintenance of an individual or family.
The allowance is offset against the family's income and varies by
family size. The income protection allowances for parents of dependent
students and independent students with dependents other than a spouse
for the award year 1995-96 are:
----------------------------------------------------------------------------------------------------------------
Number in college
Family size (including student) ------------------------------------------------------
1 2 3 4 5
----------------------------------------------------------------------------------------------------------------
2........................................................ $11,150 $9,240
3........................................................ 13,890 11,990 $10,080
4........................................................ 17,150 15,240 13,350 $11,440
5........................................................ 20,240 18,330 16,430 14,520 $12,620
6........................................................ 23,670 21,760 19,860 17,960 16,060
----------------------------------------------------------------------------------------------------------------
For each additional family member add $2,670.
For each additional college student subtract $1,900.
----------------------------------------------------------------------------------------------------------------
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 such 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 $80,000............................................... 0+40% of NW.
$80,001 to $240,000......................................... 32,000+50% of NW over $80,000.
$240,001 to $400,000........................................ 112,000+60% of NW over $240,000.
$400,001 or more............................................ 208,000+100% of NW over $400,000.
----------------------------------------------------------------------------------------------------------------
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 there are
If the age of the older parent is -------------------------------
two parents one parent
------------------------------------------------------------------------
then the education savings and
asset protection allowance is--
-------------------------------
25 or less.............................. 0 0
26...................................... 2,300 1,600
27...................................... 4,600 3,200
28...................................... 6,900 4,900
29...................................... 9,100 6,500
30...................................... 11,400 8,100
31...................................... 13,700 9,700
32...................................... 16,000 11,300
33...................................... 18,300 13,000
34...................................... 20,600 14,600
35...................................... 22,900 16,200
36...................................... 25,200 17,800
37...................................... 27,400 19,400
38...................................... 29,700 21,100
39...................................... 32,000 22,700
40...................................... 34,300 24,300
41...................................... 35,200 24,700
42...................................... 36,100 25,300
43...................................... 37,000 25,800
44...................................... 38,000 26,500
45...................................... 38,900 26,900
46...................................... 39,900 27,600
47...................................... 40,900 28,300
48...................................... 42,000 29,000
49...................................... 43,000 29,500
50...................................... 44,100 30,200
51...................................... 45,500 30,900
52...................................... 46,700 31,700
53...................................... 48,100 32,500
54...................................... 49,700 33,400
55...................................... 50,900 34,200
56...................................... 52,500 35,000
57...................................... 54,100 36,000
58...................................... 55,700 37,100
59...................................... 57,700 37,900
60...................................... 59,500 39,000
61...................................... 61,600 40,100
62...................................... 63,400 41,300
63...................................... 65,600 42,400
64...................................... 67,900 43,600
65 or more.............................. 70,200 45,100
------------------------------------------------------------------------
Independent Students Without Dependents Other Than a Spouse
------------------------------------------------------------------------
And the student is
If the age of the student is -------------------------------
married single
------------------------------------------------------------------------
then the education savings and
asset protection allowance is--
-------------------------------
25 or less.............................. 0 0
26...................................... 2,300 1,600
27...................................... 4,600 3,200
28...................................... 6,900 4,900
29...................................... 9,100 6,500
30...................................... 11,400 8,100
31...................................... 13,700 9,700
32...................................... 16,000 11,300
33...................................... 18,300 13,000
34...................................... 20,600 14,600
35...................................... 22,900 16,200
36...................................... 25,200 17,800
37...................................... 27,400 19,400
38...................................... 29,700 21,100
39...................................... 32,000 22,700
40...................................... 34,300 24,300
41...................................... 35,200 24,700
42...................................... 36,100 25,300
43...................................... 37,000 25,800
44...................................... 38,000 26,500
45...................................... 38,900 26,900
46...................................... 39,900 27,600
47...................................... 40,900 28,300
48...................................... 42,000 29,000
49...................................... 43,000 29,500
50...................................... 44,100 30,200
51...................................... 45,500 30,900
52...................................... 46,700 31,700
53...................................... 48,100 32,500
54...................................... 49,700 33,400
55...................................... 50,900 34,200
56...................................... 52,500 35,000
57...................................... 54,100 36,000
58...................................... 55,700 37,100
59...................................... 57,700 37,900
60...................................... 59,500 39,000
61...................................... 61,600 40,100
62...................................... 63,400 41,300
63...................................... 65,600 42,400
64...................................... 67,900 43,600
65 or more.............................. 70,200 45,100
------------------------------------------------------------------------
Independent Students With Dependents Other Than a Spouse
------------------------------------------------------------------------
And the student is
If the age of the student is -------------------------------
married single
------------------------------------------------------------------------
then the education savings and
asset protection allowance is--
-------------------------------
25 or less.............................. 0 0
26...................................... 2,300 1,600
27...................................... 4,600 3,200
28...................................... 6,900 4,900
29...................................... 9,100 6,500
30...................................... 11,400 8,100
31...................................... 13,700 9,700
32...................................... 16,000 11,300
33...................................... 18,300 13,000
34...................................... 20,600 14,600
35...................................... 22,900 16,200
36...................................... 25,200 17,800
37...................................... 27,400 19,400
38...................................... 29,700 21,100
39...................................... 32,000 22,700
40...................................... 34,300 24,300
41...................................... 35,200 24,700
42...................................... 36,100 25,300
43...................................... 37,000 25,800
44...................................... 38,000 26,500
45...................................... 38,900 26,900
46...................................... 39,900 27,600
47...................................... 40,900 28,300
48...................................... 42,000 29,000
49...................................... 43,000 29,500
50...................................... 44,100 30,200
51...................................... 45,500 30,900
52...................................... 46,700 31,700
53...................................... 48,100 32,500
54...................................... 49,700 33,400
55...................................... 50,900 34,200
56...................................... 52,500 35,000
57...................................... 54,100 36,000
58...................................... 55,700 37,100
59...................................... 57,700 37,900
60...................................... 59,500 39,000
61...................................... 61,600 40,100
62...................................... 63,400 41,300
63...................................... 65,600 42,400
64...................................... 67,900 43,600
65 or more.............................. 70,200 45,100
------------------------------------------------------------------------
4. Assessment Schedules and Rates
Two separate assessment schedules--one for dependent students, and
one for independent students with dependents other than a spouse--are
used in determining the expected family 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 financial strength which considers
both income and assets.
Dependent Students
------------------------------------------------------------------------
If AAI is-- Then the contribution is--
------------------------------------------------------------------------
Less than -$3,409............. -$750
-$3,409 to $10,000............ 22% of AAI.
$10,001 to $12,500............ $2,200+25% of AAI over $10,000.
$12,501 to $15,100............ 2,825+29% of AAI over $12,500.
$15,101 to $17,600............ 3,579+34% of AAI over $15,100.
$17,601 to $20,100............ 4,429+40% of AAI over $17,600.
$20,101 or more............... 5,429+47% of AAI over $20,100.
------------------------------------------------------------------------
Independent Students With Dependents Other Than a Spouse
------------------------------------------------------------------------
If AAI is-- Then the contribution is--
------------------------------------------------------------------------
Less than -$3,409............. -$750
-$3,409 to $10,000............ 22% of AAI.
$10,001 to $12,500............ $2,200+25% of AAI over $10,000.
$12,501 to $15,100............ $2,825+29% of AAI over $12,500.
$15,101 to $17,600............ $3,579+34% of AAI over $15,100.
$17,601 to $20,100............ $4,429+40% of AAI over $17,600.
$20,101 or more............... $5,429+47% of AAI over $20,100.
------------------------------------------------------------------------
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-earner family compared to a
one-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 $2,500 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 education expenses. There are four tables for state and
other taxes, one each for parents of dependent students, dependent
students, independent students without dependents other than a spouse,
and independent students with dependents other than a spouse.
Parents of Dependent Students
------------------------------------------------------------------------
And parents' total income is--
If parents' State or territory income of -------------------------------
residence is less than $15,000 or
$15,000 or more
------------------------------------------------------------------------
then the percentage is--
-------------------------------
Wyoming, Tennessee, Nevada, Alaska,
Texas.................................. 3 2
Louisiana, Florida, Washington, South
Dakota................................. 4 3
Alabama, Mississippi.................... 5 4
North Dakota, Illinois, Connecticut, New
Mexico, Missouri, West Virginia,
Arizona, Indiana, Oklahoma, Arkansas... 6 5
New Hampshire, Pennsylvania, Colorado,
Georgia, Kansas, Kentucky, Idaho....... 7 6
North Carolina, Virginia, Delaware,
South Carolina, Ohio, Utah, Nebraska,
Montana, California, New Jersey, Iowa,
Vermont, Hawaii........................ 8 7
Massachusetts, Rhode Island, Michigan,
Minnesota, Maine, Maryland............. 9 8
District of Columbia, Wisconsin, Oregon. 10 9
New York................................ 11 10
Other................................... 4 3
------------------------------------------------------------------------
Independent Students With Dependents Other Than a Spouse
------------------------------------------------------------------------
And student's total income is--
If student's State or territory of -------------------------------
residence is less than $15,000 or
$15,000 or more
------------------------------------------------------------------------
then the percentage is--
-------------------------------
Wyoming, Tennessee, Nevada, Alaska,
Texas.................................. 3 2
Louisiana, Florida, Washington, South
Dakota................................. 4 3
Alabama, Mississippi.................... 5 4
North Dakota, Illinois, Connecticut, New
Mexico, Missouri, West Virginia,
Arizona, Indiana, Oklahoma, Arkansas... 6 5
New Hampshire, Pennsylvania, Colorado,
Georgia, Kansas, Kentucky, Idaho....... 7 6
North Carolina, Virginia, Delaware,
South Carolina, Ohio, Utah, Nebraska,
Montana, California, New Jersey, Iowa,
Vermont, Hawaii........................ 8 7
Massachusetts, Rhode Island, Michigan,
Minnesota, Maine, Maryland District of
Columbia, Wisconsin, Oregon............ 9 8
10 9
New York................................ 11 10
Other................................... 4 3
------------------------------------------------------------------------
Dependent Students
------------------------------------------------------------------------
The percentage
If student's State or territory of residence is is--
------------------------------------------------------------------------
Alaska, Texas, South Dakota, Wyoming, Washington,
Tennessee, Nevada...................................... 0
Florida, New Hampshire.................................. 1
Connecticut, Louisiana, Illinois, North Dakota.......... 2
Mississippi, Arizona, Alabama, Pennsylvania, New Jersey,
Missouri............................................... 3
Nebraska, Indiana, Colorado, New Mexico, Oklahoma,
Kansas, West Virginia, Rhode Island, Virginia, Georgia,
Arkansas, Vermont, Michigan............................ 4
Montana, Idaho, Utah, Kentucky, Massachusetts,
California, North Carolina, South Carolina, Ohio, Iowa,
Delaware, Maine, Wisconsin............................. 5
Oregon, Maryland, Minnesota, Hawaii..................... 6
District of Columbia, New York.......................... 7
Other................................................... 2
------------------------------------------------------------------------
Independent Students Without Dependents Other Than a Spouse
------------------------------------------------------------------------
The percentage
If student's State or territory of residence is is--
------------------------------------------------------------------------
Alaska, Texas, South Dakota, Wyoming, Washington,
Tennessee, Nevada...................................... 0
Florida, New Hampshire.................................. 1
Connecticut, Louisiana, Illinois, North Dakota.......... 2
Mississippi, Arizona, Alabama, Pennsylvania, New Jersey,
Missouri............................................... 3
Nebraska, Indiana, Colorado, New Mexico, Oklahoma,
Kansas, West Virginia, Rhode Island, Virginia, Georgia,
Arkansas, Vermont, Michigan............................ 4
Montana, Idaho, Utah, Kentucky, Massachusetts,
California, North Carolina, South Carolina, Ohio, Iowa,
Delaware, Maine, Wisconsin............................. 5
Oregon, Maryland, Minnesota, Hawaii..................... 6
District of Columbia, New York.......................... 7
Other................................................... 2
------------------------------------------------------------------------
(Catalog of Federal Domestic Assistance Numbers: 84.007 Federal
Supplemental Educational Opportunity Grant; 84.032 Federal Stafford
Loan Program; 84.033 Federal Work-Study Program; 84.038 Federal
Perkins Loan Program; 84.063 Federal Pell Grant Program; Federal
Direct Student Loan Program, 84.268)
Dated: May 10, 1994.
David A. Longanecker,
Assistant Secretary for Postsecondary Education.
[FR Doc. 94-11881 Filed 5-16-94; 8:45 am]
BILLING CODE 4000-01-P
