20 U.S. Code § 1087pp - 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) of this section); and
(B) the family’s contribution from assets (determined in accordance with subsection (c) of this section);
(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 1094 of this title during the award period for which assistance under this subchapter and part C of subchapter I of chapter 34 of title 42 is requested; and
(3) for periods of enrollment of less than 9 months, for purposes other than subpart 2 of part A of this subchapter—
(A) dividing the quotient resulting under paragraph (2) by 9; and
(B) multiplying the result by the number of months in the period of enrollment;
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 1087vv of this title)—
(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 the following amount (or a successor amount prescribed by the Secretary under section 1087rr of this title)—
(I) for single or separated students, or married students where both are enrolled pursuant to subsection (a)(2)—
(aa) for academic year 2009–2010, $7,000;
(bb) for academic year 2010–2011, $7,780;
(cc) for academic year 2011–2012, $8,550; and
(dd) for academic year 2012–2013, $9,330; and
(II) for married students where 1 is enrolled pursuant to subsection (a)(2)—
(aa) for academic year 2009–2010, $11,220;
(bb) for academic year 2010–2011, $12,460;
(cc) for academic year 2011–2012, $13,710; and
(dd) for academic year 2012–2013, $14,960;
(v) in the case where a spouse is present, an employment expense allowance, as determined in accordance with paragraph (4); and
(vi) the amount of any tax credit taken under section 25A of title 26; and
(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 1087vv of this title) by a percentage determined according to the following table (or a successor table prescribed by the Secretary under section 1087rr of this title):

Percentages 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 1087rr of this title):
(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));
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 1087rr of this title), except as provided under section 1087vv (f) of this title:

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 1087rr of this title):

Asset Protection Allowances for Families and Students
If the age of the student is— And the student is married single
(1)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 64,600 42,800
65 or more 66,800 44,000

(4) Asset conversion rate
The asset conversion rate is 20 percent.
(d) Computations in case of separation, divorce, or death
In the case of a student who is divorced or separated, or whose spouse has died, the spouse’s income and assets shall not be considered in determining the family’s contribution from income or assets.

Source

(Pub. L. 89–329, title IV, § 476, as added Pub. L. 99–498, title IV, § 406(a),Oct. 17, 1986, 100 Stat. 1463; amended Pub. L. 100–50, § 14(1), (3), (4), (13)–(17), June 3, 1987, 101 Stat. 349, 351; Pub. L. 102–325, title IV, § 471(a),July 23, 1992, 106 Stat. 594; Pub. L. 103–208, § 2(g)(6),Dec. 20, 1993, 107 Stat. 2472; Pub. L. 105–78, title VI, § 609(h),Nov. 13, 1997, 111 Stat. 1524; Pub. L. 105–244, title IV, § 474,Oct. 7, 1998, 112 Stat. 1730; Pub. L. 109–171, title VIII, § 8017(b)(1),Feb. 8, 2006, 120 Stat. 173; Pub. L. 110–84, title VI, § 601(b),Sept. 27, 2007, 121 Stat. 801.)
Amendments

2007—Subsec. (b)(1)(A)(iv). Pub. L. 110–84amended cl. (iv) generally. Prior to amendment, cl. (iv) read as follows: “an income protection allowance of the following amount (or a successor amount prescribed by the Secretary under section 1087rr of this title)—
“(I) $6,050 for single students;
“(II) $6,050 for married students where both are enrolled pursuant to subsection (a)(2) of this section; and
“(III) $9,700 for married students where one is enrolled pursuant to subsection (a)(2) of this section;”.
2006—Subsec. (b)(1)(A)(iv). Pub. L. 109–171, § 8017(b)(1)(A), substituted “$6,050” for “$5,000” in subcls. (I) and (II) and “$9,700” for “$8,000” in subcl. (III).
Subsec. (c)(4). Pub. L. 109–171, § 8017(b)(1)(B), substituted “20” for “35”.
1998—Subsec. (a)(3). Pub. L. 105–244, § 474(a), added par. (3).
Subsec. (b)(1)(A)(iv). Pub. L. 105–244, § 474(b)(1), in introductory provisions, substituted “allowance of the following amount (or a successor amount prescribed by the Secretary under section 1087rr of this title)—” for “allowance of—”.
Subsec. (b)(1)(A)(iv)(I), (II). Pub. L. 105–244, § 474(b)(2), substituted “$5,000” for “$3,000”.
Subsec. (b)(1)(A)(iv)(III). Pub. L. 105–244, § 474(b)(3), substituted “$8,000” for “$6,000”.
1997—Subsec. (b)(1)(A)(vi). Pub. L. 105–78added cl. (vi).
1993—Subsec. (d). Pub. L. 103–208added subsec. (d).
1992—Pub. L. 102–325amended section generally, substituting provisions relating to family contribution for independent students without dependents other than a spouse for provisions relating to family contribution for independent students without dependents (including a spouse).
1987—Subsec. (b)(1)(A), (B). Pub. L. 100–50, § 14(13)(B), (C), substituted subpar. (A) and introductory provisions of subpar. (B) for introductory provisions of former subpar. (A) which read as follows: “computing the student’s available taxable income by deducting from the student’s adjusted gross income—”. Former subpar. (B) redesignated (C).
Subsec. (b)(1)(C). Pub. L. 100–50, § 14(13)(B), redesignated subpar. (B) as (C). Former subpar. (C) redesignated (D).
Subsec. (b)(1)(D). Pub. L. 100–50, § 14(15), which directed that subsec. (b)(1)(C) be amended by inserting “plus the amount of veterans’ benefits paid during the award period under chapters 32, 34, and 35 of title 28”, was executed to subpar. (D) to reflect the probable intent of Congress and the intervening redesignation of subpar. (C) as (D) by section 14(13)(B) ofPub. L. 100–50.
Pub. L. 100–50, § 14(13)(A), (B), redesignated subpar. (C) as (D) and substituted “subparagraph (C)” for “subparagraph (B)”.
Subsec. (b)(2). Pub. L. 100–50, § 14(1), (14), substituted “total income” for “total taxable income” and “section 1087rr of this title” for “section 1087ss of this title”.
Subsec. (b)(4)(A). Pub. L. 100–50, § 14(16)(A), substituted “$8,600” for “$8,900”.
Subsec. (b)(4)(B). Pub. L. 100–50, § 14(16), substituted “$8,600” for “$8,900” in two places and “$6,020” for “$6,230”.
Subsec. (c)(1). Pub. L. 100–50, § 14(17), substituted a semicolon for a period at end of subpar. (C) and inserted, after subpar. (C), provision that the student’s income supplemental amount from assets not be less than zero.
Subsec. (c)(2)(B). Pub. L. 100–50, § 14(3), substituted “displaced homemaker” for “dislocated homemaker”.
Subsec. (c)(2)(C). Pub. L. 100–50, § 14(4), added table and struck out former table which read as follows:

“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–$65,000 40 percent of NW
$65,001–$195,000 $26,000 plus 50 percent of NW over $65,000
$195,001–$325,000 $91,000 plus 60 percent of NW over $195,000
$325,001 or more $169,000 plus 100 percent of NW over $325,000”.

Pub. L. 100–50, § 14(1), substituted “section 1087rr of this title” for “section 1087ss of this title”.
Effective Date of 2007 Amendment

Amendment by Pub. L. 110–84effective July 1, 2009, see section 601(e) ofPub. L. 110–84, set out as a note under section 1087oo of this title.
Effective Date of 2006 Amendment

Amendment by Pub. L. 109–171effective July 1, 2006, except as otherwise provided, see section 8001(c) ofPub. L. 109–171, set out as a note under section 1002 of this title.
Pub. L. 109–171, title VIII, § 8017(b)(2),Feb. 8, 2006, 120 Stat. 173, provided that: “The amendments made by paragraph (1) [amending this section] shall apply with respect to determinations of need for periods of enrollment beginning on or after July 1, 2007.”
Effective Date of 1998 Amendment

Amendment by Pub. L. 105–244, effective Oct. 7, 1998, and applicable with respect to determinations of need under this part for academic years beginning on or after July 1, 2000, see section 480A ofPub. L. 105–244, set out as a note under section 1087kk of this title.
Effective Date of 1993 Amendment

Amendment by Pub. L. 103–208effective as if included in the Higher Education Amendments of 1992, Pub. L. 102–325, except as otherwise provided, see section 5(a) ofPub. L. 103–208, set out as a note under section 1051 of this title.
Effective Date of 1992 Amendment

Amendment by Pub. L. 102–325applicable with respect to determinations of need under this part for award years beginning on or after July 1, 1993, see section 471(b) ofPub. L. 102–325, set out as a note under section 1087kk of this title.
Effective Date of 1987 Amendment

Amendment by Pub. L. 100–50effective as if enacted as part of the Higher Education Amendments of 1986, Pub. L. 99–498, see section 27 ofPub. L. 100–50, set out as a note under section 1001 of this title.

 

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