96-13799. 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; Updates to Tables Used in the Need Analysis ...  

  • [Federal Register Volume 61, Number 106 (Friday, May 31, 1996)]
    [Notices]
    [Pages 27762-27765]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 96-13799]
    
    
    
    
    [[Page 27761]]
    
    
    _______________________________________________________________________
    
    Part V
    
    
    
    
    
    Department of Education
    
    
    
    
    
    _______________________________________________________________________
    
    
    
    Postsecondary Education: Updates to Tables Used in the Need Analysis 
    Methodology for the 1997-98 Award Year; Notice
    
    Federal Register / Vol. 61, No. 106 / Friday, May 31, 1996 / 
    Notices
    
    [[Page 27762]]
    
    
    
    DEPARTMENT OF EDUCATION
    
    
    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; 
    Updates to Tables Used in the Need Analysis Methodology for the 1997-98 
    Award Year
    
    AGENCY: Department of Education.
    
    ACTION: Notice.
    
    -----------------------------------------------------------------------
    
    SUMMARY: The Secretary of Education announces the annual updates to the 
    tables included in the need analysis methodology that will be used to 
    calculate expected family contributions for the 1997-98 award year 
    under the Federal Pell Grant, campus-based (Federal Perkins Loan, 
    Federal Work-Study, and Federal Supplemental Educational Opportunity 
    Grant), Federal Family Education Loan and William D. Ford Federal 
    Direct Loan programs. These programs are known collectively as the 
    Title IV, HEA programs. The Secretary takes this action under the 
    authority of sections 477 and 478 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, 600 Independence Avenue, S.W. (Room 3053, ROB-3), 
    Washington, D.C. 20202-5444, telephone (202) 708-7888. Deaf and hearing 
    impaired individuals may call the Federal Information Relay Service at 
    1-800-877-8339 between 8 a.m. and 8 p.m., Eastern time, Monday through 
    Friday.
    
    SUPPLEMENTARY INFORMATION: The need analysis methodology, referred to 
    as the ``Federal Needs Analysis Methodology,'' is set forth in Subpart 
    F of Title IV of the HEA. It is used to determine a student's 
    eligibility for assistance under the Title IV, HEA programs.
    
    Federal Needs Analysis Methodology
    
        Part F of Title IV of the HEA specifies the criteria, data 
    elements, calculations, and tables used in the computation of expected 
    family contributions for the Title IV, HEA programs. Section 478 of 
    Part F requires the Secretary to adjust annually for inflation four of 
    the tables included in Part F: 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. The 
    inflation changes are based, in general, upon the reported annual 
    inflation increase set forth in the Consumer Price Index for All Urban 
    Consumers that is issued by the United States Department of Labor.
        For award year 1997-98, the Secretary is charged with updating the 
    tables for income protection allowances, adjusted net worth of a 
    business or farm, and the assessment schedules and rates to account for 
    inflation that took place in calendar year 1996. However, the Secretary 
    must publish these updated tables by June 1, 1996. Therefore, the 
    Secretary must update the tables based upon an estimate of the increase 
    in the Consumer Price Index for All Urban Consumers for that period.
        The Secretary estimates that the Consumer Price Index for All Urban 
    Consumers will rise 3.3 percent during calendar year 1996. In making 
    this estimate, the Secretary assumed that the rate of increase for 
    calendar year 1996 will be the same as that reported for calendar year 
    1995.
        The table in section 1 reflects the changes in the income 
    protection allowances. This change reflects a consumer price increase 
    of 3.3 percent rounded to the nearest $10.
        The table in section 2 reflects the changes in the adjusted net 
    worth of a farm or business. This change reflects a consumer price 
    increase of 3.3 percent rounded to the nearest $5,000.
        The table in section 3 reflects the changes in the education 
    savings and asset protection allowance. This change reflects a consumer 
    price increase of 3.3 percent rounded to the nearest $100.
        The table in section 4 reflects the changes in the assessment 
    schedules and rates. This change reflects a consumer price increase of 
    3.3 percent rounded to the nearest $100.
        Section 477(b)(5) of the HEA 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 table in section 5 reflects that 
    change.
        The table in section 6, statutory allowances for State and other 
    taxes, has not been revised, but is included for informational 
    purposes.
        The following sections set forth the above described tables.
    
    1. Income Protection Allowance
    
        This statutory allowance represents 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 and family members in college. The income 
    protection allowances for parents of dependent students and independent 
    students with dependents other than a spouse for the award year 1997-98 
    are:
    
    ----------------------------------------------------------------------------------------------------------------
                                                                                    Number in college               
                    Family size (including student)                -------------------------------------------------
                                                                        1         2         3         4         5   
    ----------------------------------------------------------------------------------------------------------------
    2.............................................................   $11,750    $9,740                              
    3.............................................................    14,630    12,630   $10,620                    
    4.............................................................    18,070    16,060    14,060   $12,050          
    5.............................................................    21,320    19,310    17,310    15,300   $13,300
    6.............................................................    24,940    22,930    20,930    18,920   16,920 
    ----------------------------------------------------------------------------------------------------------------
    For each additional family member add $2,810.                                                                   
    For each additional college student subtract $2,000.                                                            
    
    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 
    statutory 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.
    
    [[Page 27763]]
    
    
    
    ------------------------------------------------------------------------
    If the net worth of a business or farm is--  Then the adjusted net worth
                                                             is:            
    ------------------------------------------------------------------------
    Less than $1..............................  $0.                         
    $1 to $85,000.............................  $0 + 40% of NW.             
    $85,001 to $250,000.......................  $34,000 + 50% of NW over    
                                                 $85,000.                   
    $250,001 to $420,000......................  $116,500 + 60% of NW over   
                                                 $250,000.                  
    $420,001 or more..........................  $218,500 + 100% of NW over  
                                                 $420,000.                  
    ------------------------------------------------------------------------
    
    3. Education Savings and Asset Protection Allowance
    
        This statutory 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
    ------------------------------------------------------------------------
                                                                            
    (1)then the education savings and asset                                 
     protection allowance is--                                              
                                                   -------------------------
    25 or less....................................  ...........  ...........
    26............................................        2,400        1,700
    27............................................        4,700        3,300
    28............................................        7,100        5,000
    29............................................        9,500        6,600
    30............................................       11,800        8,300
    31............................................       14,200       10,000
    32............................................       16,600       11,600
    33............................................       18,900       13,300
    34............................................       21,300       14,900
    35............................................       23,700       16,600
    36............................................       26,000       18,300
    37............................................       28,400       19,900
    38............................................       30,800       21,600
    39............................................       33,100       23,200
    40............................................       35,500       24,900
    41............................................       36,400       25,400
    42............................................       37,300       26,000
    43............................................       38,300       26,500
    44............................................       39,300       27,100
    45............................................       40,300       27,800
    46............................................       41,300       28,300
    47............................................       42,400       29,000
    48............................................       43,400       29,700
    49............................................       44,500       30,400
    50............................................       45,900       31,200
    51............................................       47,100       31,900
    52............................................       48,300       32,700
    53............................................       49,800       33,500
    54............................................       51,300       34,300
    55............................................       52,600       35,100
    56............................................       54,200       36,100
    57............................................       55,900       36,900
    58............................................       57,600       38,000
    59............................................       59,600       39,100
    60............................................       61,400       40,000
    61............................................       63,200       41,100
    62............................................       65,400       42,300
    63............................................       67,700       43,500
    64............................................       70,000       44,900
    65 and over...................................       72,400       46,100
    ------------------------------------------------------------------------
    
    
           Independent Students Without Dependents Other Than a Spouse      
    ------------------------------------------------------------------------
                                                       And the student is   
             If the age of the student is          -------------------------
                                                      Married       Single  
    ------------------------------------------------------------------------
                                                                            
    (1) then the education savings and asset                                
     protection allowance is--                                              
                                                   -------------------------
    25 or less....................................  ...........  ...........
    26............................................        2,400        1,700
    27............................................        4,700        3,300
    28............................................        7,100        5,000
    29............................................        9,500        6,600
    30............................................       11,800        8,300
    31............................................       14,200       10,000
    32............................................       16,600       11,600
    33............................................       18,900       13,300
    34............................................       21,300       14,900
    35............................................       23,700       16,600
    36............................................       26,000       18,300
    37............................................       28,400       19,900
    38............................................       30,800       21,600
    39............................................       33,100       23,200
    40............................................       35,500       24,900
    41............................................       36,400       25,400
    42............................................       37,300       26,000
    43............................................       38,300       26,500
    44............................................       39,300       27,100
    45............................................       40,300       27,800
    46............................................       41,300       28,300
    47............................................       42,400       29,000
    48............................................       43,400       29,700
    49............................................       44,500       30,400
    50............................................       45,900       31,200
    51............................................       47,100       31,900
    52............................................       48,300       32,700
    53............................................       49,800       33,500
    54............................................       51,300       34,300
    55............................................       52,600       35,100
    56............................................       54,200       36,100
    57............................................       55,900       36,900
    58............................................       57,600       38,000
    59............................................       59,600       39,100
    60............................................       61,400       40,000
    61............................................       63,200       41,100
    62............................................       65,400       42,300
    63............................................       67,700       43,500
    64............................................       70,000       44,900
    65 and over...................................       72,400       46,100
    ------------------------------------------------------------------------
    
    
            Independent Students With Dependents Other Than a Spouse        
    ------------------------------------------------------------------------
                                                       And the student is   
             If the age of the student is          -------------------------
                                                      Married       Single  
    ------------------------------------------------------------------------
                                                                            
    (1) then the education savings and asset                                
     protection allowance is--                                              
                                                   -------------------------
    25 or less....................................  ...........  ...........
    26............................................        2,400        1,700
    27............................................        4,700        3,300
    28............................................        7,100        5,000
    29............................................        9,500        6,600
    30............................................       11,800        8,300
    31............................................       14,200       10,000
    32............................................       16,600       11,600
    33............................................       18,900       13,300
    34............................................       21,300       14,900
    35............................................       23,700       16,600
    36............................................       26,000       18,300
    37............................................       28,400       19,900
    38............................................       30,800       21,600
    39............................................       33,100       23,200
    40............................................       35,500       24,900
    41............................................       36,400       25,400
    42............................................       37,300       26,000
    43............................................       38,300       26,500
    44............................................       39,300       27,100
    45............................................       40,300       27,800
    46............................................       41,300       28,300
    47............................................       42,400       29,000
    48............................................       43,400       29,700
    49............................................       44,500       30,400
    50............................................       45,900       31,200
    51............................................       47,100       31,900
    52............................................       48,300       32,700
    53............................................       49,800       33,500
    54............................................       51,300       34,300
    55............................................       52,600       35,100
    56............................................       54,200       36,100
    57............................................       55,900       36,900
    58............................................       57,600       38,000
    59............................................       59,600       39,100
    60............................................       61,400       40,000
    61............................................       63,200       41,100
    62............................................       65,400       42,300
    63............................................       67,700       43,500
    64............................................       70,000       44,900
    65 and over...................................       72,400       46,100
    ------------------------------------------------------------------------
    
    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. The statutory assessment schedules are as 
    follows:
    
    [[Page 27764]]
    
    
    
                               Dependent Students                           
    ------------------------------------------------------------------------
                    If AAI is--                  Then the contribution is-- 
    ------------------------------------------------------------------------
    Less than -$3,409.........................  -$750.                      
    -$3,409 to $10,500........................  22% of AAI.                 
    $10,501 to $13,200........................  $2,310 + 25% of AAI over    
                                                 $10,500.                   
    $13,201 to $15,900........................  $2,985 + 29% of AAI over    
                                                 $13,200.                   
    $15,901 to $18,500........................  $3,768 + 34% of AAI over    
                                                 $15,900.                   
    $18,501 to $21,200........................  $4,652 + 40% of AAI over    
                                                 $18,500.                   
    $21,201 or more...........................  $5,732 + 47% of AAI over    
                                                 $21,200.                   
    ------------------------------------------------------------------------
    
    
            Independent Students With Dependents Other Than a Spouse        
    ------------------------------------------------------------------------
                    If AAI is--                  Then the contribution is-- 
    ------------------------------------------------------------------------
    Less than -$3,409.........................  -$750.                      
    -$3,409 to $10,500........................  22% of AAI.                 
    $10,501 to $13,200........................  $2,310 + 25% of AAI over    
                                                 $10,500.                   
    $13,201 to $15,900........................  $2,985 + 29% of AAI over    
                                                 $13,200.                   
    $15,901 to $18,500........................  $3,768 + 34% of AAI over    
                                                 $15,900.                   
    $18,501 to $21,200........................  $4,652 + 40% of AAI over    
                                                 $18,500.                   
    $21,201 or more...........................  $5,732 + 47% of AAI over    
                                                 $21,200.                   
    ------------------------------------------------------------------------
    
    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 $2,700 or 35 percent of earned income.
    
    6. Allowance for State and Other Taxes
    
        The statutory 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 of residence is -------------------------
                                                     Less than    $15,000 or
                                                     $15,000 or      more   
    ------------------------------------------------------------------------
                                                                            
    (1) 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   
    ------------------------------------------------------------------------
                                                                            
    (1) 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
    ------------------------------------------------------------------------
    
    
    [[Page 27765]]
    
    
    
                               Dependent Students                           
    ------------------------------------------------------------------------
                                                                     The    
          If student's state or territory of residence is         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
                                                                           2
    ------------------------------------------------------------------------
    
    
           Independent Students Without Dependents Other Than a Spouse      
    ------------------------------------------------------------------------
                                                                     The    
          If student's state or territory of residence is         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
    ------------------------------------------------------------------------
    
        Dated: May 29, 1996.
    David A. Longanecker,
    Assistant Secretary for Postsecondary Education.
    (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)
    
    [FR Doc. 96-13799 Filed 5-30-96; 8:45 am]
    BILLING CODE 4000-01-P
    
    

Document Information

Published:
05/31/1996
Department:
Education Department
Entry Type:
Notice
Action:
Notice.
Document Number:
96-13799
Pages:
27762-27765 (4 pages)
PDF File:
96-13799.pdf