Publication Date: May 29, 2012

Posted Date: May 29, 2012

Subject: Federal Need Analysis Methodology for the 2013-2014 Award Year: Federal Pell Grant, Federal Perkins Loan, Federal Work-Study, Federal Supplemental Educational Opportunity Grant, William D. Ford Federal Direct Loan, and TEACH Grant Programs

FR Type: Notice


[Federal Register Volume 77, Number 103 (Tuesday, May 29, 2012)]
[Notices]
[Pages 31600-31605]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-12939]
 
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DEPARTMENT OF EDUCATION
 
Federal Need Analysis Methodology for the 2013-2014 Award Year: 
Federal Pell Grant, Federal Perkins Loan, Federal Work-Study, Federal 
Supplemental Educational Opportunity Grant, William D. Ford Federal 
Direct Loan, and TEACH Grant Programs
 
AGENCY: Federal Student Aid, Department of Education.
 
ACTION: Notice.
 
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    Overview Information: Catalog of Federal Domestic Assistance (CFDA) 
Numbers: 84.063 Federal Pell Grant Program; 84.038 Federal Perkins Loan 
Program; 84.033 Federal Work-Study Programs; 84.007 Federal 
Supplemental Educational Opportunity Grant Program; 84.268 William D. 
Ford Federal Direct Loan Program; 84.379 TEACH Grant Program.
SUMMARY: The Secretary 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 
2013-2014 for the student financial aid programs authorized under title 
IV of the Higher Education Act of 1965, as amended (HEA). An EFC is the 
amount that 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 
programs include the Federal Pell Grant, Federal Perkins Loan, Federal 
Work-Study, Federal Supplemental Educational Opportunity Grant, William 
D. Ford Federal Direct Loan, and the Teach Grant Programs (title IV, 
HEA programs).
 
FOR FURTHER INFORMATION CONTACT: Ms. Marya Dennis, Management and 
Program Analyst, 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 HEA specifies the 
criteria, data elements, calculations, and tables used in the Federal 
Need Analysis Methodology EFC calculations.
    Section 478 of part F of title IV 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 for general price inflation. The changes are based, in 
general, upon increases in the Consumer Price Index (CPI).
    For award year 2013-2014, the Secretary is charged with updating 
the income protection allowance for parents of dependent students, 
adjusted net worth of a business or farm, and the assessment schedules 
and rates to account for inflation that took place between December 
2011 and December 2012. However, because the Secretary must publish 
these tables before December 2012, 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 (CPI-U) for 2012. The 
Secretary must also account for any misestimation of inflation for the 
prior year. In developing the table values for the 2012-13 award year, 
the Secretary assumed a 0.8 percent increase in the CPI-U for the 
period December 2010 through December 2011. Actual inflation for this 
time period was 2.9 percent. The Secretary estimates that the increase 
in the CPI-U for the period December 2011 through December 2012 will be 
2.2 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 by updating the procedures for determining the 
income protection allowance for dependent students, as well as the 
income protection allowance tables for both independent students with 
dependents other than a spouse, and independent students without 
dependents other than a spouse. As amended by the CCRAA, the HEA now 
includes new 2013-2014 award year values for these income protection 
allowances. The updated tables are in sections 1, 2, and 4 of this 
notice.
    The Secretary must also revise, for each award year, the education 
savings and asset protection allowances as provided for in section 
478(d) of the HEA. The Education Savings and Asset Protection Allowance 
table for award year 2013-2014 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 upon increases in the Bureau of 
Labor Statistics budget of the marginal costs for a two-worker family 
compared to a one-worker family for food away from home, apparel, 
transportation, and household furnishings and operations. The 
Employment Expense Allowance
 
[[Page 31601]]
 
table for award year 2013-2014 has been updated in section 5 of this 
notice.
    The HEA provides for the following annual updates:
    1. Income Protection Allowance (IPA). 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. The IPA for the dependent student is $6,130. The IPAs for 
parents of dependent students for award year 2013-2014 are:
 
*NOTE: CHARTS OMITTED -- SEE PDF FILE FOR CHARTs

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 section.
    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: May 23, 2012.
James W. Runcie,
Chief Operating Officer, Federal Student Aid.
[FR Doc. 2012-12939 Filed 5-25-12; 8:45 am]
BILLING CODE 4000-01-P

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