00-13399. Federal Pell 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:

Office of Student Financial Assistance, Department of Education.

ACTION:

Notice of revision of the Federal need analysis methodology for the 2001-2002 award year.

SUMMARY:

The Secretary of Education 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 2001-2002 under part F of title IV of the Higher Education Act (HEA) of 1965, as amended (Title IV, HEA Programs). 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, HEA Programs include the Federal Pell Grant, campus-based (Federal Perkins Loan, Federal Work-Study, and Federal Supplemental Educational Opportunity Grant Programs), Federal Family Education Loan, and William D. Ford Federal Direct Loan Programs.

FOR FURTHER INFORMATION CONTACT:

Ms. Edith Bell, Program Specialist, U.S. Department of Education, 400 Maryland Avenue, SW., (Room 4621, ROB-3), Washington, DC 20202-5444. Telephone: [phone]. If you use a telecommunications device for the deaf (TDD), you may call the Federal Information Relay Service (FIRS) at 1-800-877-8339.

Individuals with disabilities may obtain this document in an alternate format (e.g., Braille, large print, audiotape or computer diskette) 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 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 take into account inflation. The changes are based, in general, upon increases in the Consumer Price Index.

For the award year 2001-2002 the Secretary is charged with updating the income protection allowance, adjusted net worth of a business or farm, and the assessment schedules and rates to account for inflation that took place between December 1999 and December 2000. However, since the Secretary must publish these tables before December 2000, 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 1999. The Secretary estimates that the increase in the Consumer Price Index for all Urban Consumers for the period December 1999 through December 2000 will be 2.3 percent. The updated tables are in sections 1, 2, and 4 of this notice.

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 2001-2002 has been updated in section 3 of this notice.

Section 477(b)(5) of part F of the HEA 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 of this notice.

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 allowance for the dependent student is $2,250. The income protection allowances for parents of dependent students and independent students with dependents other than a spouse for award year 2001-2002 are:

Family size	Number in college
	1	2	3	4	5
2	12,760	10,580
3	15,890	13,720	11,540
4	19,630	17,440	15,270	13,090
5	23,160	20,970	18,800	16,620	14,450
6	27,090	24,900	22,730	20,550	18,380
For each additional family member add $3,060.
For each additional college student subtract $2,170.

The income protection allowances for independent students without dependents other than a spouse for award year 2001-2002 are:

Marital status	Number in college
Single	1	$5,110
Married	2	5,110
Married	1	8,180

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 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—	The adjusted net worth is—
Less than $1	0
$1 to $90,000	0	+	40%	of NW
$90,001 to $275,000	36,000	+	50%	of NW over	$90,000
$275,001 to $455,000	128,500	+	60%	of NW over	275,000
$455,001 or more	236,500	+	100%	of NW over	455,000

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

If the age of the older parent is—	And there are—
	Two parents	One parent
	Then the education savings and asset protection allowance is—
25 or less	0	0
26	2,500	1,500
27	5,000	2,900
28	7,500	4,400
29	10,000	5,800
30	12,500	7,300
31	15,000	8,800
32	17,500	10,200
33	19,900	11,700
34	22,400	13,100
35	24,900	14,600
36	27,400	16,100
37	29,900	17,500
38	32,400	19,000
39	34,900	20,400
40	37,400	21,900
41	38,400	22,300
42	39,300	22,800
43	40,300	23,300
44	41,400	23,800
45	42,400	24,400
46	43,500	24,900
47	44,600	25,500
48	45,700	26,100
49	46,800	26,700
50	48,300	27,200
51	49,500	27,900
52	50,800	28,600
53	52,300	29,400
54	53,600	30,100
55	55,300	30,800
56	56,900	31,500
57	58,700	32,400
58	60,400	33,200
59	62,200	34,200
60	64,100	35,000
61	66,000	36,000
62	68,300	37,000
63	70,600	38,000
64	72,700	39,100
65 and over	75,100	40,400

Independent Students Without Dependents Other Than a Spouse

If the age of the student is—	And the student is—
	Married	Single
	Then the education savings and asset protection allowance is—
25 or less	0	0
26	2,500	1,500
27	5,000	2,900
28	7,500	4,400
29	10,000	5,800
30	12,500	7,300
31	15,000	8,800
32	17,500	10,200
33	19,900	11,700
34	22,400	13,100
35	24,900	14,600
36	27,400	16,100
37	29,900	17,500
38	32,400	19,000
39	34,900	20,400
40	37,400	21,900
41	38,400	22,300
42	39,300	22,800
43	40,300	23,300
44	41,400	23,800
45	42,400	24,400
46	43,500	24,900
47	44,600	25,500
48	45,700	26,100
49	46,800	26,700
50	48,300	27,200
51	49,500	27,900
52	50,800	28,600
53	52,300	29,400
54	53,600	30,100
55	55,300	30,800
56	56,900	31,500
57	58,700	32,400
58	60,400	33,200
59	62,200	34,200
60	64,100	35,000
61	66,000	36,000
62	68,300	37,000
63	70,600	38,000
64	72,700	39,100
65 and over	75,100	40,400

Independent Students With Dependents Other Than a Spouse

If the age of the student is—	And the student is—
	Married	Single
	Then the education savings and assets protection allowance is—
25 or less	0	0
26	2,500	1,500
27	5,000	2,900
28	7,500	4,400
29	10,000	5,800
30	12,500	7,300
31	15,000	8,800
32	17,500	10,200
33	19,900	11,700
34	22,400	13,100
35	24,900	14,600
36	27,400	16,100
37	29,900	17,500
38	32,400	19,000
39	34,900	20,400
40	37,400	21,900
41	38,400	22,300
42	39,300	22,800
43	40,300	23,300
44	41,400	23,800
45	42,400	24,400
46	43,500	24,900
47	44,600	25,500
48	45,700	26,100
49	46,800	26,700
50	48,300	27,200
51	49,500	27,900
52	50,800	28,600
53	52,300	29,400
54	53,600	30,100
55	55,300	30,800
56	56,900	31,500
57	58,700	32,400
58	60,400	33,200
59	62,200	34,200
60	64,100	35,000
61	66,000	36,000
62	68,300	37,000
63	70,600	38,000
64	72,700,	39,100
65 and over	75,100	40,400

4. Assessment Schedules and Rates. Two schedules, one for dependent students and one for independent students with dependents other than a spouse, are used to determine the expected 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 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 ($3,409)	-$750
($3,409) to $11,400		+	22%	of AAI
$11,401 to $14,300	2,508	+	25%	of AAI over	$11,400
$14,301 to $17,200	3,233	+	29%	of AAI over	14,300
$17,201 to $20,100	4,074	+	34%	of AAI over	17,200
$20,101 to $23,000	5,060	+	40%	of AAI over	20,100
$23,001 or more	6,220	+	47%	of AAI over	23,000

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 ($3,409)	-$750
($3,409) to $11,400			22%	of AAI
$11,401 to $14,300	2,508	+	25%	of AAI over	$11,400
$14,301 to $17,200	3,233	+	29%	of AAI over	14,300
$17,201 to $20,100	4,074	+	34%	of AAI over	17,200
$20,101 to $23,000	5,060	+	40%	of AAI over	20,100
$23,001 or more	6,220	+	47%	of AAI over	23,000

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 wage earner family compared to a one wage 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 $2,900 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 educational expenses. There are four tables 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.

Parents of Dependent Students

If parents' State or territory of residence is:	And parents' total income is—
	less than $15,000	$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

If student's State or territory of residence is:	And student's total income is—
	Less than $15,000	$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

Dependent Students

If student's State or territory of residence is:	The percentage 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

If student's State or territory of residence is:	The percentage 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

Electronic Access to This Document

You may view this document, as well as all other Department of Education documents published in the Federal Register, in text or Adobe Portable Document Format (PDF) on the Internet at the following sites:

http://ocfo.ed.gov/​fedreg.htm

http://www.ed.gov/​news.html

http://www.ifap.ed.gov/​

To use the PDF you must have Adobe Acrobat Reader, which is available free at the previous sites. If you have questions about using the PDF, call the U.S. Government Printing Office (GPO), toll free, at 1-888-293-6498; or in Washington, DC, area at [phone].

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.access.gpo.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; William D. Ford Federal Direct Loan Program, 84.268)

Dated: May 23, 2000.

Jim Lynch,

Acting Chief Operating Officer, Student Financial Assistance.