[Federal Register Volume 80, Number 101 (Wednesday, May 27, 2015)]
[Notices]
[Pages 30217-30223]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-12803]
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DEPARTMENT OF EDUCATION
Federal Need Analysis Methodology for the 2016-17 Award Year--
Federal Pell Grant, Federal Perkins Loan, Federal Work-Study, Federal
Supplemental Educational Opportunity Grant, William D. Ford Federal
Direct Loan, Iraq and Afghanistan Service Grant and TEACH Grant
Programs
AGENCY: Federal Student Aid, Department of Education.
ACTION: Notice.
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Catalog of Federal Domestic Assistance (CFDA) Numbers: 84.063;
84.038; 84.033; 84.007; 84.268; 84.408; 84.379.
SUMMARY: The Secretary announces the annual updates to the tables used
in the statutory Federal Need Analysis Methodology that determines a
student's expected family contribution (EFC) for award year 2016-17 for
these student financial aid programs. The intent of this notice is to
alert the financial aid community and the broader public to these
required annual updates used in the determination of student aid
eligibility.
FOR FURTHER INFORMATION CONTACT: Marya Dennis, 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) or a text
telephone (TTY), call the Federal Relay Service (FRS), toll free, at 1-
800-877-8339.
SUPPLEMENTARY INFORMATION: Part F of title IV of the Higher Education
Act of 1965, as amended (HEA), specifies the criteria, data elements,
calculations, and tables the Department of Education (Department) uses
in the Federal Need Analysis Methodology to determine the EFC.
Section 478 of the HEA requires the Secretary to annually update
the following four tables for price inflation--the Income Protection
Allowance (IPA), the Adjusted Net Worth (NW) of a Business or Farm, the
Education Savings and Asset Protection Allowance, and the Assessment
Schedules and Rates. The updates are based, in general, upon increases
in the Consumer Price Index (CPI).
For award year 2016-17, the Secretary is charged with updating the
IPA for parents of dependent students, adjusted NW of a business or
farm, the education savings and asset protection allowance, and the
assessment schedules and rates to account for inflation that took place
between December 2014 and December 2015. However, because the Secretary
must publish these tables before December 2015, the increases in the
tables must be based on a percentage equal to the estimated percentage
increase in the Consumer Price Index for All Urban Consumers (CPI-U)
for 2015. The Secretary must also account for any under- or over-
estimation of inflation for the preceding year.
In developing the table values for the 2015-16 award year, the
Secretary assumed a 1.8 percent increase in the CPI-U for the period
December 2013 through December 2014. Actual inflation for this time
period was .8 percent. The Secretary estimates that the increase in the
CPI-U for the period December 2014 through December 2015 will be 2.5
percent.
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 affecting the IPA tables for the 2009-10 through 2012-13 award
years and required the Department to use a percentage of the estimated
CPI to update the table in subsequent years. These changes to the IPA
impact dependent students, as well as independent students with
dependents other than a spouse and independent students without
dependents other than a spouse. This notice includes the new 2016-17
award year values for the IPA tables, which reflect the CCRAA
amendments. The updated tables are in sections 1 (Income Protection
Allowance), 2 (Adjusted Net Worth of a Business or Farm), and 4
(Assessment Schedules and Rates) of this notice.
As provided for in section 478(d) of the HEA, the Secretary must
also revise the education savings and asset protection allowances for
each award year. The Education Savings and Asset Protection Allowance
table for award year 2016-17 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 on increases in the Bureau of
Labor Statistics' marginal costs budget for a two-worker family
compared to a one-worker family. The items covered by this calculation
are: Food away from home, apparel, transportation, and household
furnishings and operations. The Employment Expense Allowance table for
award year 2016-17 has been updated in section 5 of this notice.
The HEA requires the following annual updates:
1. Income Protection Allowance. This allowance is the amount of
living
[[Page 30218]]
expenses associated with the maintenance of an individual or family
that may be offset against the family's income. The allowance varies by
family size. The IPA for the dependent student is $6,400. The IPAs for
parents of dependent students for award year 2016-17 are as follows:
Parents of Dependent Students
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Number in college
Family size -------------------------------------------------------------------------------
1 2 3 4 5
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2............................... $17,840 $14,790 .............. .............. ..............
3............................... 22,220 19,180 $16,130 .............. ..............
4............................... 27,440 24,390 21,350 $18,300 ..............
5............................... 32,380 29,320 26,290 23,240 $20,200
6............................... 37,870 34,820 31,780 28,730 25,690
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For each additional family member add $4,270. For each additional
college student subtract $3,040.
The IPAs for independent students with dependents other than a
spouse for award year 2016-17 are as follows:
Independent Students With Dependents Other Than a Spouse
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Number in college
Family size -------------------------------------------------------------------------------
1 2 3 4 5
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2............................... $25,210 $20,900 .............. .............. ..............
3............................... 31,390 27,100 $22,790 .............. ..............
4............................... 38,760 34,460 30,170 $25,850 ..............
5............................... 45,740 41,420 37,130 32,830 $28,540
6............................... 53,490 49,190 44,910 40,580 36,300
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For each additional family member add $6,040. For each additional
college student subtract $4,290.
The IPAs for single independent students and independent students
without dependents other than a spouse for award year 2016-17 are as
follows:
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Number in
Marital status college IPA
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Single.......................................... 1 $9,960
Married......................................... 2 9,960
Married......................................... 1 15,960
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2. Adjusted Net Worth of a Business or Farm. A portion of the full
NW (assets less debts) 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.
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If the NW of a business or farm is Then the adjusted NW is
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Less than $1................................ $0.
$1 to $125,000.............................. $0 + 40% of NW.
$125,001 to $380,000........................ $50,000 + 50% of NW over $125,000.
$380,001 to $635,000........................ $177,500 + 60% of NW over $380,000.
$635,001 or more............................ $330,500 + 100% of NW over $635,000.
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3. Education Savings and Asset Protection Allowance. This allowance
protects a portion of NW (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.
Parents of Dependent Students
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And they are
If the age of the older parent is -------------------------------------
Married Single
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Then the education savings and asset
protection allowance is
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25 or less........................ 0 0
26................................ 400 200
[[Page 30219]]
27................................ 700 400
28................................ 1,100 600
29................................ 1,500 900
30................................ 1,900 1,100
31................................ 2,200 1,300
32................................ 2,600 1,500
33................................ 3,000 1,700
34................................ 3,400 1,900
35................................ 3,700 2,100
36................................ 4,100 2,300
37................................ 4,500 2,600
38................................ 4,900 2,800
39................................ 5,200 3,000
40................................ 5,600 3,200
41................................ 5,700 3,300
42................................ 5,900 3,400
43................................ 6,000 3,500
44................................ 6,100 3,500
45................................ 6,300 3,600
46................................ 6,400 3,700
47................................ 6,600 3,800
48................................ 6,800 3,900
49................................ 6,900 4,000
50................................ 7,100 4,000
51................................ 7,300 4,100
52................................ 7,500 4,200
53................................ 7,700 4,300
54................................ 7,900 4,400
55................................ 8,100 4,600
56................................ 8,300 4,700
57................................ 8,500 4,800
58................................ 8,800 4,900
59................................ 9,000 5,000
60................................ 9,300 5,100
61................................ 9,500 5,300
62................................ 9,800 5,400
63................................ 10,100 5,500
64................................ 10,400 5,700
65 or older....................... 10,700 5,800
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Independent Students With Dependents Other Than a Spouse
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And they are
If the age of the student is -------------------------------------
Married Single
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Then the education savings and asset
protection allowance is
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25 or less........................ 0 0
26................................ 400 200
27................................ 700 400
28................................ 1,100 600
29................................ 1,500 900
30................................ 1,900 1,100
31................................ 2,200 1,300
32................................ 2,600 1,500
33................................ 3,000 1,700
34................................ 3,400 1,900
35................................ 3,700 2,100
36................................ 4,100 2,300
37................................ 4,500 2,600
38................................ 4,900 2,800
39................................ 5,200 3,000
40................................ 5,600 3,200
41................................ 5,700 3,300
42................................ 5,900 3,400
[[Page 30220]]
43................................ 6,000 3,500
44................................ 6,100 3,500
45................................ 6,300 3,600
46................................ 6,400 3,700
47................................ 6,600 3,800
48................................ 6,800 3,900
49................................ 6,900 4,000
50................................ 7,100 4,000
51................................ 7,300 4,100
52................................ 7,500 4,200
53................................ 7,700 4,300
54................................ 7,900 4,400
55................................ 8,100 4,600
56................................ 8,300 4,700
57................................ 8,500 4,800
58................................ 8,800 4,900
59................................ 9,000 5,000
60................................ 9,300 5,100
61................................ 9,500 5,300
62................................ 9,800 5,400
63................................ 10,100 5,500
64ENT>10,400........... 5,700
65 or older....................... 10,700 5,800
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Independent Students Without Dependents Other Than a Spouse
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And they are
If the age of the student is -------------------------------------
Married Single
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Then the education savings and asset
protection allowance is
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25 or less........................ 0 0
26................................ 400 200
27................................ 700 400
28................................ 1,100 600
29................................ 1,500 900
30................................ 1,900 1,100
31................................ 2,200 1,300
32................................ 2,600 1,500
33................................ 3,000 1,700
34................................ 3,400 1,900
35................................ 3,700 2,100
36................................ 4,100 2,300
37................................ 4,500 2,600
38................................ 4,900 2,800
39................................ 5,200 3,000
40................................ 5,600 3,200
41................................ 5,700 3,300
42................................ 5,900 3,400
43................................ 6,000 3,500
44................................ 6,100 3,500
45................................ 6,300 3,600
46................................ 6,400 3,700
47................................ 6,600 3,800
48................................ 6,800 3,900
49................................ 6,900 4,000
50................................ 7,100 4,000
51................................ 7,300 4,100
52................................ 7,500 4,200
53................................ 7,700 4,300
54................................ 7,900 4,400
55................................ 8,100 4,600
56................................ 8,300 4,700
57................................ 8,500 4,800
58................................ 8,800 4,900
[[Page 30221]]
59................................ 9,000 5,000
60................................ 9,300 5,100
61................................ 9,500 5,300
62................................ 9,800 5,400
63................................ 10,100 5,500
64................................ 10,400 5,700
65 or older....................... 10,700 5,800
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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 from family financial resources toward educational
expenses. 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:
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If AAI is Then the contribution is
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Less than -$3,409........................... -$750.
-$3,409 to $15,900.......................... 22% of AAI.
$15,901 to $20,000.......................... $3,498 + 25% of AAI over $15,900.
$20,001 to $24,100.......................... $4,523 + 29% of AAI over $20,000.
$24,101 to $28,200.......................... $5,712 + 34% of AAI over $24,100.
$28,201 to $32,200.......................... $7,106 + 40% of AAI over $28,200.
$32,201 or more............................. $8,706 + 47% of AAI over $32,200.
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The contribution for an independent student with dependents other
than a spouse is computed according to the following schedule:
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If AAI is Then the contribution is
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Less than -$3,409........................... -$750.
-$3,409 to $15,900.......................... 22% of AAI.
$15,901 to $20,000.......................... $3,498 + 25% of AAI over $15,900.
$20,001 to $24,100.......................... $4,523 + 29% of AAI over $20,000.
$24,101 to $28,200.......................... $5,712 + 34% of AAI over $24,100.
$28,201 to $32,200.......................... $7,106 + 40% of AAI over $28,200.
$32,201 or more............................. $8,706 + 47% of AAI over $32,200.
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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 on the marginal differences in costs for a two-worker family
compared to a one-worker family. The items covered by these additional
expenses are: 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 $4,000 or 35 percent of earned income.
6. Allowance for State and Other Taxes. The allowance for State and
other taxes protects a portion of parents' and students' incomes 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.
[[Page 30222]]
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Parents of dependents and Dependents and
independents with dependents other independents
than a spouse without
State -------------------------------------- dependents other
Percent of total income than a spouse
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Under $15,000 $15,000 & Up All (%)
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Alabama................................................ 3 2 2
Alaska................................................. 2 1 0
Arizona................................................ 4 3 2
Arkansas............................................... 4 3 3
California............................................. 7 6 5
Colorado............................................... 4 3 3
Connecticut............................................ 8 7 5
Delaware............................................... 5 4 3
District of Columbia................................... 7 6 5
Florida................................................ 3 2 1
Georgia................................................ 5 4 3
Hawaii................................................. 5 4 4
Idaho.................................................. 5 4 3
Illinois............................................... 6 5 3
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 5
Massachusetts.......................................... 6 5 4
Michigan............................................... 4 3 3
Minnesota.............................................. 6 5 4
Mississippi............................................ 3 2 2
Missouri............................................... 4 3 3
Montana................................................ 4 3 3
Nebraska............................................... 5 4 3
Nevada................................................. 2 1 1
New Hampshire.......................................... 5 4 1
New Jersey............................................. 9 8 4
New Mexico............................................. 3 2 2
New York............................................... 9 8 6
North Carolina......................................... 5 4 4
North Dakota........................................... 2 1 1
Ohio................................................... 5 4 3
Oklahoma............................................... 3 2 2
Oregon................................................. 7 6 5
Pennsylvania........................................... 5 4 3
Rhode Island........................................... 7 6 3
South Carolina......................................... 4 3 3
South Dakota........................................... 2 1 1
Tennessee.............................................. 2 1 1
Texas.................................................. 3 2 1
Utah................................................... 5 4 3
Vermont................................................ 6 5 3
Virginia............................................... 6 5 4
Washington............................................. 3 2 1
West Virginia.......................................... 3 2 2
Wisconsin.............................................. 7 6 4
Wyoming................................................ 1 0 1
Other.................................................. 2 1 1
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Accessible Format: Individuals with disabilities can obtain this
document in an accessible format (e.g., braille, large print,
audiotape, or compact disc) on request to the contact person listed
under FOR FURTHER INFORMATION CONTACT in this notice.
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You may also access documents of the Department published in the
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feature at this site, you can limit your search to documents published
by the Department.
Program Authority: 20 U.S.C. 1087rr.
[[Page 30223]]
Dated: May 21, 2015.
James W. Runcie,
Chief Operating Officer, Federal Student Aid.
[FR Doc. 2015-12803 Filed 5-26-15; 8:45 am]
BILLING CODE 4000-01-P