REVISION OF PART F.

SEC. 471. REVISION OF PART F. (a) Amendment.— Part F of title IV of the Act is amended to read as follows: “PART F— NEED ANALYSIS “SEC. 471. AMOUNT OF NEED. “Except as otherwise provided therein, the amount of need of any student for financial assistance under this title (except subparts 1 or 4 of part A) is equal to— “(1) the cost of attendance of such student, minus “(2) the expected family contribution for such student, minus “(3) estimated financial assistance not received under this title (as defined in section 480(j)). “SEC. 472. COST OF ATTENDANCE. “For the purpose of this title, the term ‘cost of attendance’ means— “(1) tuition and fees normally assessed a student carrying the same academic workload as determined by the institution, and including costs for rental or purchase of any equipment, materials, or supplies required of all students in the same course of study; “(2) an allowance for books, supplies, transportation, and miscellaneous personal expenses for a student attending the institution on at least a half-time basis, as determined by the institution; “(3) an allowance (as determined by the institution) for room and board costs incurred by the student which— 106 STAT. 586 “(A) shall be an allowance of not less than $1,500 for a student without dependents residing at home with parents; “(B) for students without dependents residing in institutionally owned or operated housing, shall be a standard allowance determined by the institution based on the amount normally assessed most of its residents for room and board; and “(C) for all other students shall be an allowance based on the expenses reasonably incurred by such students for room and board, except that the amount may not be less than $2,500; “(4) for less than half-time students (as determined by the institution) tuition and fees and an allowance for only books, supplies, and transportation (as determined by the institution) and dependent care expenses (in accordance with paragraph (8)): “(5) for a student engaged in a program of study by correspondence, only tuition and fees and, if required, books and supplies, travel, and room and board costs incurred specifically in fulfilling a required period of residential training; “(6) for incarcerated students only tuition and fees and, if required, books and supplies; “(7) for a student enrolled in an academic program in a program of study abroad approved for credit by the student’s home institution, reasonable costs associated with such study (as determined by the institution at which such student is enrolled); “(8) for a student with one or more dependents, an allowance based on the estimated actual expenses incurred for such dependent care, based on the number and age of such dependents, except that— “(A) such allowance shall not exceed the reasonable cost in the community in which such student resides for the kind of care provided; and “(B) the period for which dependent care is required includes, but is not limited to, class-time, study-time, field work, internships, and commuting time; “(9) for a student with a disability, an allowance (as determined by the institution) for those expenses related to the student’s disability, including special services, personal assistance, transportation, equipment, and supplies that are reasonably incurred and not provided for by other assisting agencies; “(10) for a student receiving all or part of the student’s instruction by means of telecommunications technology, no distinction shall be made with respect to the mode of instruction in determining costs, but this paragraph shall not be construed to permit including the cost of rental or purchase of equipment; and “(11) for a student placed in a work experience under a cooperative education program, an allowance for reasonable costs associated with such employment (as determined by the institution). “SEC. 473. FAMILY CONTRIBUTION. “For the purpose of this title, except subpart 4 of part A, the term ‘family contribution’ with respect to any student means the 106 STAT. 587amount which the student and the student’s family may be reasonably expected to contribute toward the student’s postsecondary education tor the academic year for which the determination is made, as determined in accordance with this part. “SEC. 474. DETERMINATION OF EXPECTED FAMILY CONTRIBUTION; DATA ELEMENTS. “(a) General Rule for Determination of Expected Family Contribution.— The expected family contribution— “(1) for a dependent student shall be determined in accordance with section 475; “(2) for a single independent student or a married independent student without dependents (other than a spouse) shall be determined in accordance with section 476; and “(3) for an independent student with dependents other than a spouse shall be determined in accordance with section 477. “(b) Data Elements.— The following data elements are considered in determining the expected family contribution: “(1) the available income of (A) the student and the student’s spouse, or (B) the student and the student’s parents, in the case of a dependent student; “(2) the number of dependents in the family of the student; “(3) the number of dependents in the family of the student who are enrolled or accepted for enrollment, on at least a half-time basis, in a degree, certificate, or other program leading to a recognized educational credential at an institution of higher education that is an eligible institution in accordance with the provisions of section 487 and for whom the family may reasonably be expected to contribute to their postsecondary education; “(4) the net assets of (A) the student and the student’s spouse, and (B) the student and the student’s parents, in the case of a dependent student; “(5) the marital status of the student; “(6) the age of the older parent, in the case of a dependent student, and the student; and “(7) the additional expenses incurred (A) in the case of a dependent student, when both parents of the student are employed or when the family is headed by a single parent who is employed, or (B) in the case of an independent student, when the student is married and the student’s spouse is employed, or when the employed student qualifies as a surviving spouse or as a head of a household under section 2 of the Internal Revenue Code of 1986. “SEC. 475. FAMILY CONTRIBUTION FOR DEPENDENT STUDENTS. “(a) Computation of Expected Family Contribution.— For each dependent student, the expected family contribution is equal to the sum of— “(1) the parents’ contribution from adjusted available income (determined in accordance with subsection (b)); “(2) the student contribution from available income (determined in accordance with subsection (g)); and “(3) the student contribution from assets (determined in accordance with subsection (h)). “(b) Parents’ Contribution From Adjusted Available Income.— The parents’ contribution from adjusted available income is equal to the amount determined by— 106 STAT. 588 “(1) computing adjusted available income by adding— “(A) the parents’ available income (determined in accordance with subsection (c)); and “(B) the parents’ contribution from assets (determined in accordance with subsection (d)); “(2) assessing such adjusted available income in accordance with the assessment schedule set forth in subsection (e); and “(3) dividing the assessment resulting under paragraph (2) by the number of the family members who are enrolled or accepted for enrollment, on at least a half-time basis, in a degree, certificate, or other program leading to a recognized educational credential at an institution of higher education that is an eligible institution in accordance with the provisions of section 487 during the award period for which assistance under this title is requested; except that the amount determined under this subsection shall not be less than zero. “(c) Parents’ Available Income.— “(1) In general.— The parents’ available income is determined by deducting from total income (as defined in section 480)— “(A) Federal income taxes; “(B) an allowance for State and other taxes, determined in accordance with paragraph (2); “(C) an allowance for social security taxes, determined in accordance with paragraph (3); “(D) an income protection allowance, determined in accordance with paragraph (4); and “(E) an employment expense allowance, determined in accordance with paragraph (5). “(2) Allowance for state and other taxes.— The allowance for State and other taxes is equal to an amount determined by multiplying total income (as defined in section 480) by a percentage determined according to the following table (or a successor table prescribed by the Secretary under section 478): 106 STAT. 589 “Percentage for Computation of State and Other Tax Allowances If parent’s State or territory of residence is— And parent’s total income is— less than $15,000 or $15,000 or more then the percentage is— Alaska, Puerto Rico, Wyoming 3 2 American Samoa, Guam, Louisiana, Nevada, Texas, Trust Territory, Virgin Islands 4 3 Florida, South Dakota, Tennessee, New Mexico 5 4 North Dakota, Washington 6 5 Alabama, Arizona, Arkansas, Indiana, Mississippi, Missouri, Montana, New Hampshire, Oklahoma, West Virginia 7 6 Colorado, Connecticut, Georgia, Illinois, Kansas, Kentucky 8 7 California, Delaware, Idaho, Iowa, Nebraska, North California, Ohio, Pennsylvania, South Carolina, Utah, Vermont, Virginia, Canada, Mexico 9 8 Maine, New Jersey 10 9 District of Columbia, Hawaii, Maryland, Massachusetts, Oregon, Rhode Island 11 10 Michigan, Minnesota 12 11 Wisconsin 13 12 New York 14 13 Other 9 8 “(3) Allowance for social security taxes.— The allowance for social security taxes is equal to the amount earned by each parent multiplied by the social security withholding rate appropriate to the tax year of the earnings, up to the maximum statutory social security tax withholding amount for that same tax year. “(4) Income protection allowance.— The income protection allowance is determined by the following table (or a successor table prescribed by the Secretary under section 478): “Income Protection Allowance Family Size Number in College For each additional subtract: (including student) 1 2 3 4 5 2 $10,520 $8,720 $1,790 3 13,100 11,310 9,510 4 16,180 14,380 12,590 $10,790 5 19,090 17,290 15,500 18,700 $11,910 6 22,330 20,530 18,740 16,940 15,150 For each additional add: 2,520 2,520 2,520 2,520 2,520 106 STAT. 590 “(5) Employment expense allowance.— The employment expense allowance is determined as follows (or using a successor provision prescribed by the Secretary under section 478): “(A) If both parents were employed in the year for which their income is reported and both have their incomes reported in determining the expected family contribution, such allowance is equal to the lesser of $2,500 or 35 percent of the earned income of the parent with the lesser earned income. “(B) If a parent qualifies as a surviving spouse or as a head of household as defined in section 2 of the Internal Revenue Code, such allowance is equal to the lesser of $2,500 or 35 percent of such parent’s earned income. “(d) Parents’ Contribution From Assets.— “(1) In general.— The parents’ contribution from assets is equal to— “(A) the parental net worth (determined in accordance with paragraph (2)); minus “(B) the education savings and asset protection allowance (determined in accordance with paragraph (3)); multiplied by “(C) the asset conversion rate (determined in accordance with paragraph (4)), except that the result shall not be less than zero. “(2) Parental net worth.— The parental net worth is calculated by adding— “(A) the current balance of checking and savings accounts and cash on hand; “(B) the net value of investments and real estate, excluding the net value of the principal place of residence; and “(C) the adjusted net worth of a business or farm, computed on the basis of the net worth of such business or farm (hereafter in this subsection referred to as ‘NW’), determined in accordance with the following table (or a successor table prescribed by the Secretary under section 478), except as provided under section 480(f): “Adjusted Net Worth of a Business or Farm If the net worth of a business or farm is— Then the adjusted net worth is: Less than $1 $0 $1—$75,000 40 percent of NW $75,001—$225,000 $30,000 plus 50 percent of NW over $75,000 $225,001—$375,000 $105,000 plus 60 percent of NW over $225,000 $375,001 or more $195,000 plus 100 percent of NW over $375,000 “(3) Education savings and asset protection allowance.— The education savings and asset protection allowance is calculated according to the following table (or a successor table prescribed by the Secretary under section 478): 106 STAT. 591 “Education Savings and Assent Protection Allowances for Families and Students If the age of the eldest parent is— And there are two parents one parent then the percentage is— 25 or less $ 0 $0 26 2,200 1,600 27 4,300 3,200 28 6,500 4,700 29 8,600 6,300 30 10,800 7,900 31 13,000 9,500 32 15,100 11,100 33 17,300 12,600 34 19,400 14,200 35 21,600 15,800 36 23,800 17,400 37 25,900 19,000 38 28,100 20,500 39 30,200 22,100 40 32,400 23,700 41 33,300 24,100 42 34,100 24,700 43 35,000 25,200 44 35,700 25,800 45 36,600 26,300 46 37,600 26,900 47 38,800 27,600 48 39,800 28,200 49 40,800 28,800 50 41,800 29,500 51 43,200 30,200 52 44,300 31,100 53 45,700 31,800 54 47,100 32,600 55 48,300 33,400 56 49,800 34,400 57 51,300 35,200 58 52,900 36,200 59 54,800 37,200 60 56,500 38,100 61 58,500 39,200 62 60,300 40,300 63 62,400 41,500 64 64,500 42,800 65 or more 66,800 44,000 “(4) Asset conversion rate.— The asset conversion rate is 12 percent. “(e) Assessment Schedule.— The adjusted available income (as determined under subsection (b)(1) and hereafter in this subsection referred to as ‘AAI’) is assessed according to the following table (or a successor table prescribed by the Secretary under section 478): 106 STAT. 592 “Parents’ Assessment From Adjusted Available Income (AAI) If AAI is— Then the assessment is— Less than —$3,409 —$750 —$3,409 to $9,400 22% of AAI $9,401 to $11,800 $,068 + 25% of AAI over $9,400 $11,801 to $14,200 $2,668 + 29% of AAI over $11,800 $14,201 to $16,600 $3,364 + 34% of AAI over $14,200 $19,001 or more $5,140 + 47% of AAI over $19,000 “(f) Computations in Case of Separation, Divorce, Remarriage, or Death.— “(1) Divorced or separated parents.— Parental income and assets for a student whose parents are divorced or separated is determined under the following procedures: “(A) Include only the income and assets of the parent with whom the student resided for the greater portion of the 12-month period preceding the date of the application. “(B) If the preceding criterion does not apply, include only the income and assets of the parent who provided the greater portion of the student’s support for the 12-month period preceding the date of application. “(C) If neither of the preceding criteria apply, include only the income and assets of the parent who provided the greater support during the most recent calendar year for which parental support was provided. “(2) Death of a parent.— Parental income and assets in the case of the death of any parent is determined as follows: “(A) If either of the parents has died, the student shall include only the income and assets of the surviving parent. “(B) If both parents have died, the student shall not report any parental income or assets. “(3) Remarried parents.— Income in the case of a parent whose income and assets are taken into account under paragraph (1) of this subsection, or a parent who is a widow or widower and whose income is taken into account under paragraph (2) of this subsection, has remarried, is determined as follows: The income of that parent’s spouse shall be included in determining the parent’s adjusted available income only if— “(A) the student’s parent and the stepparent are married as of the date of application for the award year concerned; and “(B) the student is not an independent student. “(g) Student Contribution From Available Income.— “(1) In general.— The student contribution from available income is equal to— “(A) the student’s total income (determined in accordance with section 480); minus “(B) the adjustment to student income (determined in accordance with paragraph (2); multiplied by “(C) the assessment rate as determined in paragraph (5); except that the amount determined under this subsection shall not be less than zero. 106 STAT. 593 “(2) Adjustment to student income.— The adjustment to student income is equal to the sum of— “(A) Federal income taxes of the student; “(B) an allowance for State and other income taxes (determined in accordance with paragraph (3)); “(C) an allowance for social security taxes determined in accordance with paragraph (4); and “(D) an income protection allowance of $1,750. “(3) Allowance for state and other income taxes.— The allowance for State and other income taxes is equal to an amount determined by multiplying total income (as defined in section 480) by a percentage determined according to the following table (or a successor table prescribed by the Secretary under section 478): “Precentages for Computation of State and Other Tax Allowance If the students’ State or territory of residence is— The percentage is— Alaska, American Samoa, Florida, Guam, Nevada, South Dakota, Tennessee, Texas, Trust Territory, Virgin Islands, Washington, Wyoming 0 Connecticut, Louisiana, Puerto Rico 1 Arizona, New Hampshire, New Mexico, North Dakota 2 Alabama, Colorado, Illinois, Indiana, Kansas, Mississippi, Missouri, Montana, Nebraska, New Jersey, Oklahoma 3 Arkansas, Georgia, Iowa, Kentucky, Maine, Pennsylvania, Utah, Vermont, Virginia, West Virginia, Canada, Mexico 4 California, Idaho, Massachusetts, North Carolina, Ohio, Rhode Island, South Carolina 5 Hawaii, Maryland, Michigan, Wisconsin 6 Delaware, District of Columbia, Minnesota, Oregon 7 New York 8 “(4) Allowance for social security taxes.— The allowance for social security taxes is equal to the amount earned by the student multiplied by the social security withholding rate appropriate to the tax year of the earnings, up to the maximum statutory social security tax withholding amount for that same tax year. “(5) The student’s available income (determined in accordance with paragraph (1) of this subsection) is assessed at 50 percent. “(h) Student Contribution From Assets.— The student contribution from assets is determined by calculating the net assets of the student and multiplying such amount by 35 percent, except that the result shall not be less than zero. “(i) Adjustments to Parents’ Contribution for Enrollment Periods Other Than 9 Months For Purposes Other Than Subpart 2 of Part A of This Title.— For periods of enrollment other than 9 months, the parents’ contribution from adjusted available income (as determined under subsection (b)) is determined as follows for purposes other than subpart 2 of part A of this title: “(1) For periods of enrollment less than 9 months, the parents’ contribution from adjusted available income is divided by 9 and the result multiplied by the number of months enrolled. “(2) For periods of enrollment greater than 9 months— 106 STAT. 594 “(A) the parents’ adjusted available income (determined in accordance with subsection (b)(1)) is increased by the difference between the income protection allowance (determined in accordance with subsection (c)(4)) for a family of four and a family of five, each with one child in college; “(B) the resulting revised parents’ adjusted available income is assessed according to subsection (e) and adjusted according to subsection (b)(3) to determine a revised parents’ contribution from adjusted available income; “(C) the original parents’ contribution from adjusted available income is subtracted from the revised parents’ contribution from adjusted available income, and the result is divided by 12 to determine the monthly adjustment amount; and “(D) the original parents’ contribution from adjusted available income is increased by the product of the monthly adjustment amount multiplied by the number of months greater than 9 for which the student will be enrolled. “SEC. 476. FAMILY CONTRIBUTION FOR INDEPENDENT STUDENTS WITHOUT DEPENDENTS OTHER THAN A SPOUSE. “(a) Computation of Expected Family Contribution.— For each independent student without dependents other than a spouse, the expected family contribution is determined by— “(1) adding— “(A) the family’s contribution from available income (determined in accordance with subsection (b)); and “(B) the family’s contribution from assets (determined in accordance with subsection (c)); and “(2) dividing the sum resulting under paragraph (1) by the number of students who are enrolled or accepted for enrollment, on at least a half-time basis, in a degree, certificate, or other program leading to a recognized educational credential at an institution of higher education that is an eligible institution in accordance with the provisions of section 487 during the award period for which assistance under this title is requested; except that the amount determined under this subsection shall not be less than zero. “(b) Family’s Contribution From Available Income.— “(1) In general.— The family’s contribution from income is determined by— “(A) deducting from total income (as defined in section 480)— “(i) Federal income taxes; “(ii) an allowance for State and other taxes, determined in accordance with paragraph (2); “(iii) an allowance for social security taxes, determined in accordance with paragraph (3); “(iv) an income protection allowance of— “(I) $3,000 for single students; “(II) $3,000 for married students where both are enrolled pursuant to subsection (a)(2); and “(III) $6,000 for married students where one is enrolled pursuant to subsection (a)(2); and “(v) in the case where a spouse is present, an employment expense allowance, as determined in accordance with paragraph (4); and 106 STAT. 595 “(B) assessing such available income in accordance with paragraph (5). “(2) Allowance for state and other taxes.—The allowance for State and other taxes is equal to an amount determined by multiplying total income (as defined in section 480) by a percentage determined according to the following table (or a successor table prescribed by the Secretary under section 478): “Precentages for Computation of State and Other Tax Allowance If the students’ State or territory of residence is— The percentage is— Alaska, American Samoa, Florida, Guam, Nevada, South Dakota, Tennessee, Texas, Trust Territory, Virgin Islands, Washington, Wyoming 0 Connecticut, Louisiana, Puerto Rico 1 Arizona, New Hampshire, New Mexico, North Dakota 2 Alabama, Colorado, Illinois, Indiana, Kansas, Mississippi, Missouri, Montana, Nebraska, New Jersey, Oklahoma 3 Arkansas, Georgia, Iowa, Kentucky, Maine, Pennsylvania, Utah, Vermont, Virginia, West Virginia, Canada, Mexico 4 California, Idaho, Massachusetts, North Carolina, Ohio, Rhode Island, South Carolina 5 Hawaii, Maryland, Michigan, Wisconsin 6 Delaware, District of Columbia, Minnesota, Oregon 7 New York 8 Other 4 “(3) Allowance for social security taxes.— The allowance for social security taxes is equal to the amount earned by the student (and spouse, if appropriate), multiplied by the social security withholding rate appropriate to the tax year preceding the award year, up to the maximum statutory social security tax withholding amount for that same tax year. “(4) Employment expenses allowance.— The employment expense allowance is determined as follows (or using a successor provision prescribed by the Secretary under section 478): “(A) If the student is married and the student’s spouse is employed in the year for which income is reported, such allowance is equal to the lesser of $2,500 or 35 percent of the earned income of the student or spouse with the lesser earned income. “(B) If a student is not married, the employment expense allowance is zero. “(5) Assessment of available income.— The family’s available income (determined in accordance with paragraph (1)(A) of this subsection) is assessed at 50 percent. “(c) Family Contribution From Assets.— “(1) In general.— The family’s contribution from assets is equal to— “(A) the family’s net worth (determined in accordance with paragraph (2)); minus “(B) the asset protection allowance (determined in accordance with paragraph (3)); multiplied by “(C) the asset conversion rate (determined in accordance with paragraph (4)); 106 STAT. 596 except that the family’s contribution from assets shall not be less than zero. “(2) Family’s net worth.— The family’s net worth is calculated by adding— “(A) the current balance of checking and savings accounts and cash on hand; “(B) the net value of investments and real estate, excluding the net value in the principal place of residence; and “(C) the adjusted net worth of a business or farm, computed on the basis of the net worth of such business or farm (hereafter referred to as ‘NW’), determined in accordance with the following table (or a successor table prescribed by the Secretary under section 478), except as provided under section 480(f): “Adjusted Net Worth of a Business or Farm If the net worth of a business or farm is— Then the adjusted net worth is— Less than $1 $0 $1—$75,000 40 percent of NW $75,000—$225,000 $30,000 plus 50 percent of NW over $75,000 $225,001—$375,000 $105,000 plus 60 percent of NW over $225,000 $375,001 or more $195,000 plus 100 percent of NW over $375,000 “(3) Asset protection allowance.—The asset protection allowance is calculated according to the following table (or a successor table prescribed by the Secretary under section 478): 106 STAT. 597 “Asset Protection Allowances for Families and Students If the age of the student is— And the student is married single then the allowance is— 25 or less $ 0 $0 26 2,200 1,600 27 4,300 3,200 28 6,500 4,700 29 8,600 6,300 30 10,800 7,900 31 13,000 9,500 32 15,100 11,100 33 17,300 12,600 34 19,400 14,200 35 21,600 15,800 36 23,800 17,400 37 25,900 19,000 38 28,100 20,500 39 30,200 22,100 40 32,400 23,700 41 33,300 24,100 42 34,100 24,700 43 35,000 25,200 44 35,700 25,800 45 36,600 26,300 46 37,600 26,900 47 38,800 27,600 48 39,800 28,200 49 40,800 28,800 50 41,800 29,500 51 43,200 30,200 52 44,300 31,100 53 45,700 31,800 54 47,100 32,600 55 48,300 33,400 56 49,800 34,400 57 51,300 35,200 58 52,900 36,200 59 54,800 37,200 60 56,500 38,100 61 58,500 39,200 62 60,300 40,300 63 62,400 41,500 64 64,500 42,800 65 or more 66,800 44,000 “(4) Asset conversion rate.— The asset conversion rate is 35 percent. “SEC. 477. FAMILY CONTRIBUTION FOR INDEPENDENT STUDENTS 20 USC 1087gg WITH DEPENDENTS OTHER THAN A SPOUSE. “(a) Computation of Expected Family Contribution.— For each independent student with dependents other than a spouse, the expected family contribution is equal to the amount determined by— “(1) computing adjusted available income by adding— 106 STAT. 598 “(A) the family’s available income (determined in accordance with subsection (b)); and “(B) the family’s contribution from assets (determined in accordance with subsection (c)); “(2) assessing such adjusted available income in accordance with an assessment schedule set forth in subsection (d); and “(3) dividing the assessment resulting under paragraph (2) by the number of family members who are enrolled or accepted for enrollment, on at least a half-time basis, in a degree, certificate, or other program leading to a recognized educational credential at an institution of higher education that is an eligible institution in accordance with the provisions of section 487 during the award period for which assistance under this title is requested; except that the amount determined under this subsection shall not be less than zero. “(b) Family’s Available Income.— “(1) In general.— The family’s available income is determined by deducting from total income (as defined in section 480)— “(A) Federal income taxes; “(B) an allowance for State and other taxes, determined in accordance with paragraph (2); “(C) an allowance for social security taxes, determined in accordance with paragraph (3); “(D) an income protection allowance, determined in accordance with paragraph (4); and “(E) an employment expense allowance, determined in accordance with paragraph (5). “(2) Allowance for state and other taxes.— The allowance for State and other taxes is equal to an amount determined by multiplying total income (as defined in section 480) by a percentage determined according to the following table (or a successor table prescribed by the Secretary under section 478): 106 STAT. 599 “Percentage for Computation of State and Other Tax Allowances If student’s or territory of residence is— And family’s total income is— less than $15,000 $15,000 or more then the percentage is— Alaska, Puerto Rico, Wyoming 3 2 American Samoa, Guam, Louisiana, Nevada, Texas, Trust Territory, Virgin Islands 4 3 Florida, South Dakota, Tennessee, New Mexico 5 4 North Dakota, Washington 6 5 Alabama, Arizona, Arkansas, Indiana, Mississippi, Missouri, Montana, New Hampshire, Oklahoma, West Virginia 7 6 Colorado, Connecticut, Georgia, Illinois, Kansas, Kentucky 8 7 California, Delaware, Idaho, Iowa, Nebraska, North California, Ohio, Pennsylvania, South Carolina, Utah, Vermont, Virginia, Canada, Mexico 9 8 Maine, New Jersey 10 9 District of Columbia, Hawaii, Maryland, Massachusetts, Oregon, Rhode Island 11 10 Michigan, Minnesota 12 11 Wisconsin 13 12 New York 14 13 Other 9 8 “(3) Allowance for social security taxes.— The allowance for social security taxes is equal to the amount estimated to be earned by the student (and spouse, if appropriate) multiplied by the social security withholding rate appropriate to the tax year preceding the award year, up to the maximum statutory social security tax withholding amount for that same tax year. “(4) Income protection allowance.— The income protection allowance is determined by the following table (or a successor table prescribed by the Secretary under section 478): “Income Protection Allowance Family Size Number in College For each additional subtract: (including student) 1 2 3 4 5 2 $10,520 $8,720 $1,790 3 13,100 11,310 9,510 4 16,180 14,380 12,590 $10,790 5 19,090 17,290 15,500 18,700 $11,910 6 22,330 20,530 18,740 16,940 15,150 For each additional add: 2,520 2,520 2,520 2,520 2,520 106 STAT. 600 “(5) Employment expense allowance.— The employment expense allowance is determined as follows (or a successor table prescribed by the Secretary under section 478): “(A) If the student is married and the student’s spouse is employed in the year for which their income is reported, such allowance is equal to the lesser of $2,500 or 35 percent of the earned income of the student or spouse with the lesser earned income. “(B) If a student qualifies as a surviving spouse or as a head of household as defined in section 2 of the Internal Revenue Code, such allowance is equal to the lesser of $2,500 or 35 percent of the student’s earned income. “(c) Family’s Contribution From Assets.— “(1) In general.— The family’s contribution from assets is equal to— “(A) the family net worth (determined in accordance with paragraph (2)); minus “(B) the asset protection allowance (determined in accordance with paragraph (3)); multiplied by “(C) the asset conversion rate (determined in accordance with paragraph (4)), except that the result shall not be less than zero. “(2) Family net worth.— The family net worth is calculated by adding— “(A) the current balance of checking and savings accounts and cash on hand; “(B) the net value of investments and real estate, excluding the net value in the principal place of residence; and “(C) the adjusted net worth of a business or farm, computed on the basis of the net worth of such business or farm (hereafter referred to as ‘NW’), determined in accordance with the following table (or a successor table prescribed by the Secretary under section 478), except as provided under section 480(f): “Adjusted Net Worth of a Business or Farm If the net worth of a business or farm is— Then the adjusted net worth is: Less than $1 $0 $1—$75,000 40 percent of NW $75,001—$225,000 $30,000 plus 50 percent of NW over $75,000 $225,001—$375,000 $105,000 plus 60 percent of NW over $225,000 $375,001 or more $195,000 plus 100 percent of NW over $375,000 “(3) Asset protection allowance.— The asset protection allowance is calculated according to the following table (or a successor table prescribed by the Secretary under section 478): 106 STAT. 601 “Asset Protection Allowances for Families and Students If the age of the student is— And the student is married single then the allowance is— 25 or less $ 0 $0 26 2,200 1,600 27 4,300 3,200 28 6,500 4,700 29 8,600 6,300 30 10,800 7,900 31 13,000 9,500 32 15,100 11,100 33 17,300 12,600 34 19,400 14,200 35 21,600 15,800 36 23,800 17,400 37 25,900 19,000 38 28,100 20,500 39 30,200 22,100 40 32,400 23,700 41 33,300 24,100 42 34,100 24,700 43 35,000 25,200 44 35,700 25,800 45 36,600 26,300 46 37,600 26,900 47 38,800 27,600 48 39,800 28,200 49 40,800 28,800 50 41,800 29,500 51 43,200 30,200 52 44,300 31,100 53 45,700 31,800 54 47,100 32,600 55 48,300 33,400 56 49,800 34,400 57 51,300 35,200 58 52,900 36,200 59 54,800 37,200 60 56,500 38,100 61 58,500 39,200 62 60,300 40,300 63 62,400 41,500 64 64,500 42,800 65 or more 66,800 44,000 “(4) Asset conversion rate.— The asset conversion rate is 12 percent. “(d) Assessment Schedule.— The adjusted available income (as determined under subsection (a)(1) and hereafter referred to as ‘AAI’) is assessed according to the following table (or a successor table prescribed by the Secretary under section 478): 106 STAT. 602 “Assessment From Adjusted Available Income (AAI) If AAI is— Then the assessment is— Less than —$3,409 —$750 —$3,409 to $9,400 22% of AAI $9,401 to $11,800 $,068 + 25% of AAI over $9,400 $11,801 to $14,200 $2,668 + 29% of AAI over $11,800 $14,201 to $16,600 $3,364 + 34% of AAI over $14,200 $19,001 or more $5,140 + 47% of AAI over $19,000 “SEC. 478. REGULATIONS; UPDATED TABLES. “(a) Authority To Prescribe Regulations Restricted.— (1) Notwithstanding any other provision of law, the Secretary shall not have the authority to prescribe regulations to carry out this part except— “(A) to prescribe updated tables in accordance with subsections (b) through (h) of this section; or “(B) to propose modifications in the need analysis methodology required by this part. “(2) Any regulation proposed by the Secretary that (A) updates tables in a manner that does not comply with subsections (b) through (h) of this section, or (B) that proposes modifications under paragraph (1)(B) of this subsection, shall not be effective unless approved by joint resolution of the Congress by May 1 following the date such regulations are published in the Federal Register in accordance with section 482. If the Congress fails to approve such regulations by such May 1, the Secretary shall publish in the Federal Register in accordance with section 482 updated tables for the applicable award year that are prescribed in accordance with subsections (b) through (h) of this section. “(b) Income Protection Allowance.— For each academic year after academic year 1992–1993, the Secretary shall publish in the Federal Register a revised table of income protection allowances for the purpose of sections 475(c)(4) and 477(b)(4). Such revised table shall be developed by increasing each of the dollar amounts contained in the table in each such section by a percentage equal to the estimated percentage increase in the Consumer Price Index (as determined by the Secretary) between December 1992 and the December next preceding the beginning of such academic year, and rounding the result to the nearest $10. “(c) Adjusted Net Worth of a Farm or Business.— For each award year after award year 1992–1993, the Secretary shall publish in the Federal Register a revised table of adjusted net worth of a farm or business for purposes of sections 475(d)(2)(C), 476(c)(2)(C), and 477(c)(2)(C). Such revised table shall be developed— “(1) by increasing each dollar amount that refers to net worth of a farm or business by a percentage equal to the estimated percentage increase in the Consumer Price Index (as determined by the Secretary) between 1992 and the December next preceding the beginning of such award year, and rounding the result to the nearest $5,000; and “(2) by adjusting the dollar amounts ‘$30,000’, ‘$105,000’, and ‘$195,000’ to reflect the changes made pursuant to paragraph (1). 106 STAT. 603 “(d) Education Savings and Asset Protection Allowance.— For each award year after award year 1992–1993, the Secretary shall publish in the Federal Register a revised table of allowances for the purpose of sections 475(d)(3), 476(c)(3), and 477(c)(3). Such revised table shall be developed by determining the present value cost, rounded to the nearest $100, of an annuity that would provide, for each age cohort of 40 and above, a supplemental income at age 65 (adjusted for inflation) equal to the difference between the moderate family income (as most recently determined by the Bureau of Labor Statistics), and the current average social security retirement benefits. For each age cohort below 40, the allowance shall be computed by decreasing the allowance for age 40, as updated, by one-fifteenth for each year of age below age 40 and rounding the result to the nearest $100. In making such determinations— “(1) inflation shall be presumed to be 6 percent per year; “(2) the rate of return of an annuity shall be presumed to be 8 percent; and “(3) the sales commission on an annuity shall be presumed to be 6 percent. “(e) Assessment Schedules and Rates.— For each award year after award year 1992–1993, the Secretary shall publish in the Federal Register a revised table of assessments from adjusted available income for the purpose of sections 475(e) and 477(d). Such revised table shall be developed— “(1) by increasing each dollar amount that refers to adjusted available income by a percentage equal to the estimated percentage increase in the Consumer Price Index (as determined by the Secretary) between December 1992 and the December next preceding the beginning of such academic year, rounded to the nearest $100; and “(2) by adjusting the other dollar amounts to reflect the changes made pursuant to paragraph (1). “(f) Definition of Consumer Price Index.— Abused in this section, the term ‘Consumer Price Index’ means the Consumer Price Index for All Urban Consumers published by the Department of Labor. Each annual update of tables to reflect changes in the Consumer Price Index shall be corrected for misestimation of actual changes in such Index in previous years. “(g) State and Other Tax Allowance.— For each award year after award year 1992–1993, the Secretary shall publish in the Federal Register a revised table of State and other tax allowances for the purpose of sections 475(c)(2), 475(g)(3), 476(b)(2), and 477(b)(2). The Secretary shall develop such revised table after review of the Department of the Treasury’s Statistics of Income file and determination of the percentage of income that each State’s taxes represent. “(h) Employment Expense Allowance.— For each award year after award year 1992–1993, the Secretary shall publish in the Federal Register a revised table of employment expense allowances for the purpose of sections 475(c)(5), 476(b)(4), and 477(b)(5). Such revised table shall be developed by increasing the dollar amount specified in sections 475(c)(5)(A), 475(c)(5)(B), 476(b)(4)(A), 476(b)(4)(B), 477(b)(5)(A), and 477(b)(5)(B) to reflect increases in the amount and percent of the Bureau of Labor Standards budget of the marginal costs for meals away from home, apparel and 106 STAT. 604upkeep, transportation, and housekeeping services for a two-worker versus one-worker family. “SEC. 479. SIMPLIFIED NEEDS TESTS. “(a) Simplified Application Section.— “(1) In general.— The Secretary shall develop and use an easily identifiable simplified application section as part of the common financial reporting form prescribed under section 483(a) for families described in subsections (b) and (c) this section. “(2) Reduced data requirements.— The simplified application form shall— “(A) in the case of a family meeting the requirements of subsection (b)(1), permit such family to submit only the data elements required under subsection (b)(2) for the purposes of establishing eligibility for student financial aid under this part; and “(B) in the case of a family meeting the requirements of subsection (c), permit such family to be treated as having an expected family contribution equal to zero for purposes of establishing such eligibility and to submit only the data elements required to make a determination under subsection (c). “(b) Simplified Needs Test.— “(1) Eligibility.— An applicant is eligible to file a simplified form containing the elements required by paragraph (2) if— “(A) in the case of an applicant who is a dependent student— “(i) the student’s parents file or are eligible to file a form described in paragraph (3) or certify that they are not required to file an income tax return and the student files or is eligible to file such a form or certifies that the student is not required to file an income tax return; and “(ii) the total adjusted gross income of the parents (excluding any income of the dependent student) is less than $50,000; or “(B) in the case of an applicant who is an independent student— “(i) the student files or is eligible to file a form described in paragraph (3) or certifies that the student is not required to file such an income tax return; and “(ii) the adjusted gross income of the student (and the student’s spouse, if any) is less than $50,000. “(2) Simplified test elements.— The five elements to be used for the simplified needs analysis are— “(A) adjusted gross income, “(B) Federal taxes paid, “(C) untaxed income and benefits, “(D) the number of family members, “(E) the number of family members in postsecondary education; and “(F) an allowance (A) for State and other taxes, as defined in section 475(c)(2) for dependent students and in section 477(b)(2) for independent students with dependents other than a spouse, or (B) for State and other income taxes, 106 STAT. 605as defined in section 476(b)(2) for independent students without dependents other than a spouse. “(3) Qualifying forms.— A student or family files a form described in this paragraph if the student or family, respectively, files— “(A) a form 1040A or 1040EZ required pursuant to the Internal Revenue Code of 1986; or “(B) an income tax return required pursuant to the tax code of the Commonwealth of Puerto Rico, Guam, American Samoa, the Virgin Islands, the Republic of the Marshall Islands, the Federated States of Micronesia, or Palau. “(c) Zero Expected Family Contribution.— The Secretary shall consider an applicant to have an expected family contribution equal to zero if— “(1) in the case of a dependent student— “(A) the students parents did not file, and were not required to file, a form 1040 required pursuant to the Internal Revenue Code of 1986; and “(B) the sum of the adjusted gross income of the parents is less than or equal to the maximum amount of income (rounded annually to the nearest thousand dollars) that may be earned in order to claim the maximum Federal earned income credit; or “(2) in the case of an independent student with dependents other than a spouse— “(A) the student (and the student’s spouse, if any) did not file, and was not required to file, a form 1040 required pursuant to the Internal Revenue Code of 1986; and “(B) the sum of the adjusted gross income of the student and spouse (if appropriate) is less than or equal to the maximum amount of income (rounded annually to the nearest thousand dollars) that may be earned in order to claim the maximum Federal earned income credit. An individual is not required to qualify or file for the earned income credit in order to be eligible under this subsection. “SEC. 479A. DISCRETION OF STUDENT FINANCIAL AID ADMINISTRATORS. “(a) In General.— Nothing in this part shall be interpreted as limiting the authority of the financial aid administrator, on the basis of adequate documentation, to make adjustments on a case-by-case basis to the cost of attendance or the values of the data items required to calculate the expected student or parent contribution (or both) to allow for treatment of an individual eligible applicant with special circumstances. However, this authority shall not be construed to permit aid administrators to deviate from the contributions expected in the absence of special circumstances. Special circumstances shall be conditions that differentiate an individual student from a class of students rather than conditions that exist across a class of students. Adequate documentation for such adjustments shall substantiate such special circumstances of individual students. In addition, nothing in this title shall be interpreted as limiting the authority of the student financial aid administrator in such cases to request and use supplementary information about the financial status or personal circumstances of eligible applicants in selecting recipients and determining the amount of awards under this title. No student or parent shall be charged 106 STAT. 606a fee for collecting, processing, or delivering such supplementary information. “(b) Adjustments to Assets Taken Into Account.— A student financial aid administrator shall be considered to be making a necessary adjustment in accordance with subsection (a) if— “(1) the administrator makes adjustments excluding from family income any proceeds of a sale of farm or business assets of a family if such sale results from a voluntary or involuntary foreclosure, forfeiture, or bankruptcy or an involuntary liquidation; or “(2) the administrator makes adjustments in the award level of a student with a disability so as to take into consideration the additional costs such student incurs as a result of such student’s disability. “SEC. 479B. DISREGARD OF STUDENT AID IN OTHER FEDERAL PROGRAMS. “Notwithstanding any other provision of law, student financial assistance received under this title, or under Bureau of Indian Affairs student assistance programs, shall not be taken into account in determining the need or eligibility of any person for benefits or assistance, or the amount of such benefits or assistance, under any Federal, State, or local program financed in whole or in part with Federal funds. “SEC. 479C. NATIVE AMERICAN STUDENTS. “In determining family contributions for Native American students, computations performed pursuant to this part shall exclude— “(1) any income and assets of $2,000 or less per individual payment received by the student (and spouse) and student’s parents under the Per Capita Act or the Distribution of Judgment Funds Act; and “(2) any income received by the student (and spouse) and student’s parents under the Alaskan Native Claims Settlement Act or the Maine Indian Claims Settlement Act. “SEC. 480. DEFINITIONS. “As used in this part: “(a) Total Income.— (1) Except as provided in paragraph (2), the term ‘total income’ is equal to adjusted gross income plus untaxed income and benefits for the preceding tax year minus excludable income (as defined in subsection (e)). “(2) No portion of any student financial assistance received from any program by an individual shall be included as income or assets in the computation of expected family contribution for any program funded in whole or in part under this Act. “(b) Untaxed Income and Benefits.— The term ‘untaxed income and benefits’ means— “(1) child support received; “(2) welfare benefits, including aid to families with dependent children under a State plan approved under part A of title IV of the Social Security Act and aid to dependent children; “(3) workman’s compensation; “(4) veterans’ benefits such as death pension, dependency, and indemnity compensation, but excluding veterans’ education benefits as defined in subsection (c); “(5) interest on tax-free bonds; 106 STAT. 607 “(6) housing, food, and other allowances (excluding rent subsidies for low-income housing) for military, clergy, and others (including cash payments and cash value of benefits); “(7) cash support or any money paid on the student’s behalf, except, for dependent students, funds provided by the student’s parents; “(8) the amount of earned income credit claimed for Federal income tax purposes; “(9) untaxed portion of pensions; “(10) credit for Federal tax on special fuels; “(11) the amount of foreign income excluded for purposes of Federal income taxes; “(12) untaxed social security benefits; “(13) payments to individual retirement accounts and Keogh accounts excluded from income for Federal income tax purposes; and “(14) any other untaxed income and benefits, such as Black Lung Benefits, Refugee Assistance, railroad retirement benefits, or Job Training Partnership Act noneducational benefits. “(c) Veteran and Veterans’ Education Benefits.— (1) The term “veteran’ means any individual who— “(A) has engaged in the active duty in the United States Army, Navy, Air Force, Marines, or Coast Guard; and “(B) was released under a condition other than dishonorable. “(2) The term “veterans’ education benefits’ means veterans’ benefits the student will receive during the award year, including but not limited to the following: “(A) Title 10, chapter 2: Reserve Officer Training Corps scholarship. “(B) Title 10, chapter 106: Selective Reserve. “(C) Title 10, chapter 107: Selective Reserve Educational Assistance Program. “(D) Title 37, chapter 2: Reserve Officer Training Corps Program. “(E) Title 38, chapter 30: Montgomery GI Bill—active duty. “(F) Title 38, chapter 31: vocational rehabilitation. “(G) Title 38, chapter 32: Post-Vietnam Era Veterans’ Educational Assistance Program. “(H) Title 38, chapter 35: Dependents Educational Assistance Program. “(J) Public Law 97–376, section 156: Restored Entitlement Program for Survivors (or Quayle benefits). “(J) Public Law 96–342, section 903: Educational Assistance Pilot Program. “(d) Independent Student.— The term ‘independent’, when used with respect to a student, means any individual who— “(1) is 24 years of age or older by December 31 of the award year; “(2) is an orphan or ward of the court; “(3) is a veteran of the Armed Forces of the United States (as defined in subsection (c)(1)); “(4) is a graduate or professional student; “(5) is a married individual; “(6) has legal dependents other than a spouse; or “(7) is a student for whom a financial aid administrator makes a documented determination of independence by reason of other unusual circumstances. 106 STAT. 608 “(e) Excludable Income.— The term ‘excludable income’ means— “(1) any student financial assistance awarded based on need as determined in accordance with the provisions of this part, including any income earned from work under part C of this title; “(2) any living allowance received by a participant in a program established under the National and Community Service Act of 1990; “(3) child support payments made by the student or parent; and “(4) payments made and services provided under part E of title IV of the Social Security Act. “(f) Assets.— (1) The term ‘assets’ means cash on hand, including the amount in checking and savings accounts, time deposits, money market funds, trusts, stocks, bonds, other securities, mutual funds, tax shelters, and the net value of real estate, income producing property, and business and farm assets. “(2) With respect to determinations of need under this title, other than for subpart 4 of part A, the term ‘assets’ shall not include the net value of— “(A) the family’s principal place of residence; or “(B) a family farm on which the family resides. “(g) Net Assets.— The term ‘net assets’ means the current market value at the time of application of the assets (as defined in subsection (f)), minus the outstanding liabilities or indebtedness against the assets. “(h) Treatment of Income Taxes Paid to Other Jurisdictions.— (1) The tax on income paid to the Governments of the Commonwealth of Puerto Rico, Guam, American Samoa, the Virgin Islands, or the Commonwealth of the Northern Mariana Islands, the Republic of the Marshall Islands, the Federated States of Micronesia, or Palau under the laws applicable to those jurisdictions, or the comparable tax paid to the central government of a foreign country, shall be treated as Federal income taxes. “(2) References in this part to the Internal Revenue Code of 1986, Federal income tax forms, and the Internal Revenue Service shall, for purposes of the tax described in paragraph (1), be treated as references to the corresponding laws, tax forms, and tax collection agencies of those jurisdictions, respectively, subject to such adjustments as the Secretary may provide by regulation. “(i) Current Balance.— The term ‘current balance of checking and savings accounts’ does not include any funds over which an individual is barred from exercising discretion and control because of the actions of any State in declaring a bank emergency due to the insolvency of a private deposit insurance fund. “(j) Other Financial Assistance; Tuition Prepayment Plans.— (1) For purposes of determining a student’s eligibility for funds under this title, estimated financial assistance not received under this title shall include all scholarships, grants, loans, or other assistance known to the institution at the time the determination of the student’s need is made, including veterans’ education benefits as defined in subsection (c). “(2) (A) Except as provided in subparagraph (B), for purposes of determining a student’s eligibility for funds under this title, tuition prepayment plans shall reduce the cost of attendance (as determined under section 472) by the amount of the prepayment, and shall not be considered estimated financial assistance. 106 STAT. 609 “(B) If the institutional expense covered by the prepayment must be part of the student’s cost of attendance for accounting purposes, the prepayment shall be considered estimated financial assistance.”. (b) Effective Date for Amendment to Part F.— The changes made in part F of title IV of the Act by the amendment made by this section shall apply with respect to determinations of need under such part F for award years beginning on or after July 1, 1993.