02-13704. 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:

Federal Student Aid, Department of Education.

ACTION:

Notice of revision of the Federal need analysis Methodology for the 2003-2004 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 2003-2004 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, Management and Program Analyst, U.S. Department of Education, Federal Student Aid, Union Center Plaza, 830 First Street NE, Washington, DC 20002-5345. 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 alternative 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 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 2003-2004 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 2001 and December 2002. However, since the Secretary must publish these tables before December 2002, 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 2001. The Secretary estimates that the increase in the Consumer Price Index for all urban Consumers for the period December 2001 through December 2002 will be 2.8 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 of asset protection allowances as provided for in section 478 (d) of the HEA. The Education Savings and Asset Protection Allowance table for the award year 2003-2004 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 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 and number in college. The income protection allowance for the dependent student is $2,380. The income protection allowances for parents of dependent students and independent students with dependents other than a spouse for award year 2003-2004 are:

	Number in College—
	1	2	3	4	5
Family size:
2	13,470	11,160
3	16,770	14,480	12,170
4	20,710	18,410	16,120	13,810
5	24,440	22,130	19,840	17,540	15,240
6	28,580	26,280	23,900	21,680	19,390
For each additional family member add $3,230.
For each additional college student substract $2,290.

The income protection allowances for single independent students and for independent students without dependents other than a spouse for award year 2003-2004 are:

Marital status	Number in college	Amount
Single	1	$5,400
Married	2	5,400
Married	1	8,640

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—	Then the adjusted net worth is—
Less than $1	$0
$1 to $95,000	$0 + 40% of NW
$95,001 to $290,000	$38,000 + 50% of NW over $95,000
$290,001 to $480,000	$135,000 + 60% of NW over $290,000
$480,001 or more	$249,500 + 100% of NW over $480,000

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 of parents of dependent students, one for independent students without dependents other than a spouse, and one for the 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	1,200
27	5,000	2,500
28	7,500	3,700
29	9,900	5,000
30	12,400	6,200
31	14,900	7,400
32	17,400	8,700
33	19,900	9,900
34	22,400	11,200
35	24,900	12,400
36	27,400	13,600
37	29,800	14,900
38	32,300	16,100
39	34,800	17,400
40	37,300	18,600
41	38,200	19,000
42	39,200	19,400
43	40,200	19,800
44	41,200	20,300
45	42,200	20,700
46	43,300	21,100
47	44,300	21,600
48	45,400	22,200
49	46,600	22,600
50	47,700	23,100
51	49,200	23,700
52	50,400	24,200
53	51,700	24,800
54	53,200	25,400
55	54,500	26,200
56	56,200	26,800
57	57,900	27,400
58	59,600	28,200
59	61,400	28,900
60	63,200	29,700
61	65,100	30,500
62	67,300	31,200
63	69,200	32,100
64	71,600	33,100
65 and over	74,000	34,100

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	1,200
27	5,000	2,500
28	7,500	3,700
29	9,900	5,000
30	12,400	6,200
31	14,900	7,400
32	17,400	8,700
33	19,900	9,900
34	22,400	11,200
35	24,900	12,400
36	27,400	13,600
37	29,800	14,900
38	32,300	16,100
39	34,800	17,400
40	37,300	18,600
41	38,200	19,000
42	39,200	19,400
43	40,200	19,800
44	41,200	20,300
45	42,200	20,700
46	43,300	21,100
47	44,300	21,600
48	45,400	22,200
49	46,600	22,600
50	47,700	23,100
51	49,200	23,700
52	50,400	24,200
53	51,700	24,800
54	53,200	25,400
55	54,500	26,200
56	56,200	26,800
57	57,900	27,400
58	59,600	28,200
59	61,400	28,900
60	63,200	29,700
61	65,100	30,500
62	67,300	31,200
63	69,200	32,100
64	71,600	33,100
65 and over	74,000	34,100

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 asset protection allowance is—
25 or less	0	0
26	2,500	1,200
27	5,000	2,500
28	7,500	3,700
29	9,900	5,000
30	12,400	6,200
31	14,900	7,400
32	17,400	8,700
33	19,900	9,900
34	22,400	11,200
35	24,900	12,400
36	27,400	13,600
37	29,800	14,900
38	32,300	16,100
39	34,800	17,400
40	37,300	18,600
41	38,200	19,000
42	39,200	19,400
43	40,200	19,800
44	41,200	20,300
45	42,200	20,700
46	43,300	21,100
47	44,300	21,600
48	45,400	22,200
49	46,600	22,600
50	47,400	23,100
51	49,200	23,700
52	50,400	24,200
53	51,700	24,800
54	53,200	25,400
55	54,500	26,200
56	56,200	26,800
57	57,900	27,400
58	59,600	28,200
59	61,400	28,900
60	63,200	29,700
61	65,100	30,500
62	67,300	31,200
63	69,200	32,100
64	71,600	33,100
65 and over	74,000	34,100

4. Assessment Schedules and Rates. Two schedules that are subject to updates, 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 $12,000		22% of AAI
$12,001 to $15,100	$2,640 +	25% of AAI over $12,000
$15,101 to $18,200	$3,415 +	29% of AAI over $15,100
$18,201 to $21,200	$4,314 +	34% of AAI over $18,200
$21,201 to $24,300	$5,334 +	40% of AAI over $21,200
$24,301 or more	$6,574 +	47% of AAI over $24,300

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 ($3,409)	−$750
($3,409) to $12,000		22% of AAI
$12,001 to $15,100	$2,640 +	25% of AAI over $12,000
$15,101 to $18,200	$3,415 +	29% of AAI over $15,100
$18,201 to $21,200	$4,314 +	34% of AAI over $18,200
$21,201 to $24,300	$5,334 +	40% of AAI over $21,200
$24,301 or more	$6,574 +	47% of AAI over $24,300

5. Employment Expense Allowance. This allowance for employment-related expenses, which is used for the parents of dependent students and for married independent students 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 $3,000 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 for 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 site: www.ed.gov/​legislation/​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 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 28, 2002.

Candy Kane,

Acting Chief Operating Officer, Federal Student Aid.