U.S. Code > Title 20 Education > CHAPTER 28—HIGHER EDUCATION RESOURCES AND STUDENT ASSISTANCE (§§ 1001—1161aa1) > SUBCHAPTER IV—STUDENT ASSISTANCE (§§ 1070—1099e) > Part E—Need Analysis (§§ 1087kk—1087vv) > § 1087oo. Family contribution for dependent students

§ 1087oo. 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) of this section);
(2) the student contribution from available income (determined in accordance with subsection (g) of this section); and
(3) the student contribution from assets (determined in accordance with subsection (h) of this section).
(b) Parents’ contribution from adjusted available income
The parents’ contribution from adjusted available income is equal to the amount determined by—
(1) computing adjusted available income by adding—
(A) the parents’ available income (determined in accordance with subsection (c) of this section); and
(B) the parents’ contribution from assets (determined in accordance with subsection (d) of this section);
(2) assessing such adjusted available income in accordance with the assessment schedule set forth in subsection (e) of this section; and
(3) dividing the assessment resulting under paragraph (2) by the number of the family members, excluding the student’s parents, 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;
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 1087vv of this title)—
(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);
(E) an employment expense allowance, determined in accordance with paragraph (5); and
(F) the amount of any tax credit taken by the parents under section 25A of title 26.
(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 parents’ State or territory of residence is— And parents’ total income is— less than $15,000 or $15,000 or more
(1)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 Carolina, 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 1087rr of this title):

Income Protection Allowance
Family Size (including student) Number in College 1 2 3 4 5 For each additional subtract:
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 13,700 $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

(5) Employment expense 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 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 title 26, 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 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) 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 1087rr of this title):

Education Savings and Asset Protection Allowances for Families and Students
If the age of the oldest parent is— And there are two parents one parent
(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 12 percent.
(e) Assessment schedule
The adjusted available income (as determined under subsection (b)(1) of this section 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 1087rr of this title):

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 $2,068 + 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
$16,601 to $19,000 $4,180 + 40% of AAI over $16,600
$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
If a parent whose income and assets are taken into account under paragraph (1) of this subsection, or if a parent who is a widow or widower and whose income is taken into account under paragraph (2) of this subsection, has remarried, 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 1087vv of this title); 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.
(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);
(D) an income protection allowance of the following amount (or a successor amount prescribed by the Secretary under section 1087rr of this title)—
(i) for academic year 2009–2010, $3,750;
(ii) for academic year 2010–2011, $4,500;
(iii) for academic year 2011–2012, $5,250; and
(iv) for academic year 2012–2013, $6,000;
(E) the amount of any tax credit taken by the student under section 25A of title 26; and
(F) an allowance for parents’ negative available income, determined in accordance with paragraph (6).
(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 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

(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) Assessment of available income
The student’s available income (determined in accordance with paragraph (1) of this subsection) is assessed at 50 percent.
(6) Allowance for parents’ negative available income
The allowance for parents’ negative available income is the amount, if any, by which the sum of the amounts deducted under subparagraphs (A) through (F) of subsection (c)(1) of this section exceeds the sum of the parents’ total income (as defined in section 1087vv of this title) and the parents’ contribution from assets (as determined in accordance with subsection (d) of this section).
(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 20 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 subchapter
For periods of enrollment other than 9 months, the parents’ contribution from adjusted available income (as determined under subsection (b) of this section) is determined as follows for purposes other than subpart 2 of part A of this subchapter:
(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—
(A) the parents’ adjusted available income (determined in accordance with subsection (b)(1) of this section) is increased by the difference between the income protection allowance (determined in accordance with subsection (c)(4) of this section) 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) of this section and adjusted according to subsection (b)(3) of this section 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.
(j) Adjustments to student’s contribution for enrollment periods of less than nine months
For periods of enrollment of less than 9 months, the student’s contribution from adjusted available income (as determined under subsection (g) of this section) is determined, for purposes other than subpart 2 of part A of this subchapter, by dividing the amount determined under such subsection by 9, and multiplying the result by the number of months in the period of enrollment.