Federal Need Analysis Methodology for the 2017-18 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
Federal Register, Volume 81 Issue 152 (Monday, August 8, 2016)
Federal Register Volume 81, Number 152 (Monday, August 8, 2016)
Notices
Pages 52418-52424
From the Federal Register Online via the Government Publishing Office www.gpo.gov
FR Doc No: 2016-18723
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DEPARTMENT OF EDUCATION
Federal Need Analysis Methodology for the 2017-18 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; republication.
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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: This notice is a republication of a May 24, 2016 notice (81 FR 32737) to include information that was missing from the original version. The only change to this version is in the ``Education Savings and Asset Protection Allowance'' table under the ``Parents of Dependent Students'' section, where the first row of information was missing from the original notice. No other information has changed.
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 2017-18 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.
Page 52419
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 2017-18, 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 2015 and December 2016. However, because the Secretary must publish these tables before December 2016, 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 2016. The Secretary must also account for any under- or over-
estimation of inflation for the preceding year.
In developing the table values for the 2016-17 award year, the Secretary assumed a 2.5 percent increase in the CPI-U for the period December 2014 through December 2015. Actual inflation for this time period was .7 percent. The Secretary estimates that the increase in the CPI-U for the period December 2015 through December 2016 will be 2.1 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 2017-18 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 2017-18 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 2017-18 has been updated in section 5 of this notice.
The HEA requires the following annual updates:
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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. The allowance varies by family size. The IPA for the dependent student is $6,420. The IPAs for parents of dependent students for award year 2017-18 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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-
$17,910 $14,840
-
22,300 19,250 $16,190
-
27,540 24,480 21,430 $18,360
-
32,490 29,430 26,380 23,320 $20,270
-
38,010 34,940 31,900 28,830 25,790
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For each additional family member add $4,290. For each additional college student subtract $3,050.
The IPAs for independent students with dependents other than a spouse for award year 2017-18 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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-
$25,280 $20,960
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31,480 27,180 $22,860
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38,870 34,560 30,260 $25,930
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45,870 41,540 37,240 32,920 $28,620
-
53,640 49,330 45,040 40,690 36,400
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For each additional family member add $6,060. For each additional college student subtract $4,300.
The IPAs for single independent students and independent students without dependents other than a spouse for award year 2017-18 are as follows:
Page 52420
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Number in
Marital status college IPA
Single.................................. 1 $9,980
Married................................. 2 9,980
Married................................. 1 16,010
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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 $130,000............................. $0 + 40% of NW.
$130,001 to $385,000....................... $52,000 + 50% of NW over $130,000.
$385,001 to $640,000....................... $179,500 + 60% of NW over $385,000.
$640,001 or more........................... $332,500 + 100% of NW over $640,000.
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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
-Then the education savings and
asset protection allowance is
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25 or less.............................. 0 0
-
1,100 600
-
2,200 1,300
-
3,400 1,900
-
4,500 2,600
-
5,600 3,200
-
6,700 3,800
-
7,800 4,500
-
9,000 5,100
-
10,100 5,800
-
11,200 6,400
-
12,300 7,000
-
13,400 7,700
-
14,600 8,300
-
15,700 9,000
-
16,800 9,600
-
17,100 9,800
-
17,500 10,000
-
17,900 10,200
-
18,400 10,500
-
18,800 10,700
-
19,300 10,900
-
19,800 11,200
-
20,200 11,400
-
20,700 11,700
-
21,200 12,000
-
21,700 12,200
-
22,400 12,500
-
22,900 12,800
-
23,600 13,200
-
24,100 13,500
-
24,800 13,800
-
25,600 14,100
-
26,200 14,500
-
26,900 14,900
-
27,700 15,200
Page 52421
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28,500 15,600
-
29,300 16,000
-
30,100 16,400
-
31,100 16,900
65 or older............................. 31,900 17,300
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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
-Then the education savings and
asset protection allowance is
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25 or less.............................. 0 0
-
1,100 600
-
2,200 1,300
-
3,400 1,900
-
4,500 2,600
-
5,600 3,200
-
6,700 3,800
-
7,800 4,500
-
9,000 5,100
-
10,100 5,800
-
11,200 6,400
-
12,300 7,000
-
13,400 7,700
-
14,600 8,300
-
15,700 9,000
-
16,800 9,600
-
17,100 9,800
-
17,500 10,000
-
17,900 10,200
-
18,400 10,500
-
18,800 10,700
-
19,300 10,900
-
19,800 11,200
-
20,200 11,400
-
20,700 11,700
-
21,200 12,000
-
21,700 12,200
-
22,400 12,500
-
22,900 12,800
-
23,600 13,200
-
24,100 13,500
-
24,800 13,800
-
25,600 14,100
-
26,200 14,500
-
26,900 14,900
-
27,700 15,200
-
28,500 15,600
-
29,300 16,000
-
30,100 16,400
-
31,100 16,900
65 or older............................. 31,900 17,300
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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
-Then the education savings and
asset protection allowance is
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25 or less.............................. 0 0
Page 52422
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1,100 600
-
2,200 1,300
-
3,400 1,900
-
4,500 2,600
-
5,600 3,200
-
6,700 3,800
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7,800 4,500
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9,000 5,100
-
10,100 5,800
-
11,200 6,400
-
12,300 7,000
-
13,400 7,700
-
14,600 8,300
-
15,700 9,000
-
16,800 9,600
-
17,100 9,800
-
17,500 10,000
-
17,900 10,200
-
18,400 10,500
-
18,800 10,700
-
19,300 10,900
-
19,800 11,200
-
20,200 11,400
-
20,700 11,700
-
21,200 12,000
-
21,700 12,200
-
22,400 12,500
-
22,900 12,800
-
23,600 13,200
-
24,100 13,500
-
24,800 13,800
-
25,600 14,100
-
26,200 14,500
-
26,900 14,900
-
27,700 15,200
-
28,500 15,600
-
29,300 16,000
-
30,100 16,400
-
31,100 16,900
65 or older............................. 31,900 17,300
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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 $16,000......................... 22% of AAI.
$16,001 to $20,100......................... $3,520 + 25% of AAI over $16,000.
$20,101 to $24,200......................... $4,545 + 29% of AAI over $20,100.
$24,201 to $28,300......................... $5,734 + 34% of AAI over $24,200.
$28,301 to $32,300......................... $7,128 + 40% of AAI over $28,300.
$32,301 or more............................ $8,728 + 47% of AAI over $32,300.
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The contribution for an independent student with dependents other than a spouse is computed according to the following schedule:
Page 52423
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If AAI is Then the Contribution is
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Less than -$3,409.......................... -$750
-$3,409 to $16,000......................... 22% of AAI
$16,001 to $20,100......................... $3,520 + 25% of AAI over $16,000
$20,101 to $24,200......................... $4,545 + 29% of AAI over $20,100
$24,201 to $28,300......................... $5,734 + 34% of AAI over $24,200
$28,301 to $32,300......................... $7,128 + 40% of AAI over $28,300
$32,301 or more............................ $8,728 + 47% of AAI over $32,300
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-
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.
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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.
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Parents of dependents and Dependents and
independents with dependents independents
other than a spouse without
-------------------------------- dependents
State Percent of Total Income other 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...................................................... 8 7 6
Colorado........................................................ 4 3 3
Connecticut..................................................... 9 8 5
Delaware........................................................ 5 4 3
District of Columbia............................................ 8 7 6
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.......................................................... 4 3 3
Kentucky........................................................ 5 4 4
Louisiana....................................................... 3 2 2
Maine........................................................... 6 5 4
Maryland........................................................ 8 7 6
Massachusetts................................................... 7 6 4
Michigan........................................................ 5 4 3
Minnesota....................................................... 6 5 5
Mississippi..................................................... 3 2 2
Missouri........................................................ 5 4 3
Montana......................................................... 5 4 3
Nebraska........................................................ 5 4 3
Nevada.......................................................... 2 1 1
New Hampshire................................................... 5 4 1
New Jersey...................................................... 9 8 5
New Mexico...................................................... 3 2 2
New York........................................................ 10 9 7
North Carolina.................................................. 5 4 4
North Dakota.................................................... 2 1 1
Ohio............................................................ 5 4 3
Oklahoma........................................................ 3 2 2
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Oregon.......................................................... 7 6 5
Pennsylvania.................................................... 5 4 3
Rhode Island.................................................... 7 6 4
South Carolina.................................................. 5 4 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......................................................... 2 1 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.
Electronic Access to This Document: 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 via the Federal Digital System at: www.gpo.gov/fdsys. At this site you can view this document, as well as all other documents of this Department published in the Federal Register, in text or Adobe Portable Document Format (PDF). To use PDF you must have Adobe Acrobat Reader, which is available free at this site.
You may also access documents of the Department published in the Federal Register by using the article search feature at: www.federalregister.gov. Specifically, through the advanced search feature at this site, you can limit your search to documents published by the Department.
Program Authority: 20 U.S.C. 1087rr.
Dated: August 3, 2016.
James W. Runcie,
Chief Operating Officer Federal Student Aid.
FR Doc. 2016-18723 Filed 8-5-16; 8:45 am
BILLING CODE 4000-01-P
