20 U.S.C. § 1087oo : US Code - Section 1087OO: Family contribution for dependent students

Search 20 U.S.C. § 1087oo : US Code - Section 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
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If parents' State or territory And parents' total income is -
of residence is -
less than $15,000 or
$15,000 or more
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then the percentage is -

Alaska, Puerto Rico, Wyoming 3 2
American Samoa, Guam, Louisiana, 4 3
Nevada, Texas, Trust Territory,
Virgin Islands
Florida, South Dakota, 5 4
Tennessee, New Mexico
North Dakota, Washington 6 5
Alabama, Arizona, Arkansas, 7 6
Indiana, Mississippi, Missouri,
Montana, New Hampshire,
Oklahoma, West Virginia
Colorado, Connecticut, Georgia, 8 7
Illinois, Kansas, Kentucky
California, Delaware, Idaho, 9 8
Iowa, Nebraska, North Carolina,
Ohio, Pennsylvania, South
Carolina, Utah, Vermont,
Virginia, Canada, Mexico
Maine, New Jersey 10 9
District of Columbia, Hawaii, 11 10
Maryland, Massachusetts, Oregon,
Rhode Island
Michigan, Minnesota 12 11
Wisconsin 13 12
New York 14 13
Other 9 8
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(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
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Family Size (including student): 2
Number in College 1: $10,520
Number in College 2: $8,720
Number in College 3:
Number in College 4:
Number in College 5:
Number in College For each , additional , subtract:: $1,790
Family Size (including student): 3
Number in College 1: 13,100
Number in College 2: 11,310
Number in College 3: $9,510
Family Size (including student): 4
Number in College 1: 16,180
Number in College 2: 14,380
Number in College 3: 12,590
Number in College 4: $10,790
Family Size (including student): 5
Number in College 1: 19,090
Number in College 2: 17,290
Number in College 3: 15,500
Number in College 4: 13,700
Number in College 5: $11,910
Family Size (including student): 6
Number in College 1: 22,330
Number in College 2: 20,530
Number in College 3: 18,740
Number in College 4: 16,940
Number in College 5: 15,150
Family Size (including student): For each additional add:
Number in College 1: 2,520
Number in College 2: 2,520
Number in College 3: 2,520
Number in College 4: 2,520
Number in College 5: 2,520
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(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
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If the net worth of a business Then the adjusted net worth is:
or farm is -
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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
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(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
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If the age of the oldest parent And there are
is -
two parents one parent
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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
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(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)
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If AAI is - Then the assessment is -
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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
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(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 $2,200 (or a successor
amount prescribed by the Secretary under section 1087rr of this
title);
(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
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If the students' State or territory of The percentage
residence is - is -
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Alaska, American Samoa, Florida, Guam, Nevada, 0
South Dakota, Tennessee, Texas, Trust
Territory, Virgin Islands, Washington, Wyoming
Connecticut, Louisiana, Puerto Rico 1
Arizona, New Hampshire, New Mexico, North 2
Dakota
Alabama, Colorado, Illinois, Indiana, Kansas, 3
Mississippi, Missouri, Montana, Nebraska, New
Jersey, Oklahoma
Arkansas, Georgia, Iowa, Kentucky, Maine, 4
Pennsylvania, Utah, Vermont, Virginia, West
Virginia, Canada, Mexico
California, Idaho, Massachusetts, North 5
Carolina, Ohio, Rhode Island, South Carolina
Hawaii, Maryland, Michigan, Wisconsin 6
Delaware, District of Columbia, Minnesota, 7
Oregon
New York 8
Other 4
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(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 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 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.