 
      CHAPTER 28--HIGHER EDUCATION RESOURCES AND STUDENT ASSISTANCE
 
                    SUBCHAPTER IV--STUDENT ASSISTANCE
 
                          Part E--Need Analysis
 
Sec. 1087qq. Family contribution for independent students 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--
            (A) the family's 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) assessing such adjusted available income in accordance with 
    an assessment schedule set forth in subsection (d) of this section;
        (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 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
        (4) 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 (3) 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 available income

                           (1) In general

        The family's 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 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
------------------------------------------------------------------------
                                      And family's total income is--
If student's State or territory ----------------------------------------
       of residence is--          less than $15,000     $15,000 or more
------------------------------------------------------------------------
                                  then the percentage is--
                                ----------------------------------------
Alaska, Puerto Rico, Wyoming...            3                   2
American Samoa, Guam,                      4                   3
 Louisiana, 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
------------------------------------------------------------------------

               (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 1087rr of this title):

                                           Income Protection Allowance
-------------------------------------------------------------------------------
---------------------------------
          Family Size                                           Number in Colle
ge
-------------------------------------------------------------------------------
---------------------------------
                                                                               
                      For each
      (including student)             1            2            3            4 
           5         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 a 
    successor table 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 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 title 26, 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 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
------------------------------------------------------------------------
                                            And the student is
 If the age of 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.............................         64,600              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) 
of this section and hereafter 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):

             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
------------------------------------------------------------------------

(e) 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 available income or assets.

(Pub. L. 89-329, title IV, Sec. 477, as added Pub. L. 99-498, title IV, 
Sec. 406(a), Oct. 17, 1986, 100 Stat. 1465; amended Pub. L. 100-50, 
Sec. 14(1)-(6), (8), (18), (19), June 3, 1987, 101 Stat. 349-351; Pub. 
L. 102-325, title IV, Sec. 471(a), July 23, 1992, 106 Stat. 597; Pub. L. 
103-208, Sec. 2(g)(2), (7), Dec. 20, 1993, 107 Stat. 2472; Pub. L. 105-
78, title VI, Sec. 609(i), Nov. 13, 1997, 111 Stat. 1524; Pub. L. 105-
244, title IV, Sec. 475, Oct. 7, 1998, 112 Stat. 1730.)


                               Amendments

    1998--Subsec. (a)(4). Pub. L. 105-244 added par. (4).
    1997--Subsec. (b)(1)(F). Pub. L. 105-78 added subpar. (F).
    1993--Subsec. (b)(4). Pub. L. 103-208, Sec. 2(g)(2), substituted 
``$9,510'' for ``9,510'' in table.
    Subsec. (e). Pub. L. 103-208, Sec. 2(g)(7), added subsec. (e).
    1992--Pub. L. 102-325 amended section generally, substituting 
provisions relating to family contribution for independent students with 
dependents other than a spouse for provisions relating to family 
contribution for independent students with dependents (including a 
spouse).
    1987--Subsec. (a)(1)(C). Pub. L. 100-50, Sec. 14(18), added subpar. 
(C).
    Subsec. (b)(2). Pub. L. 100-50, Sec. 14(1), substituted ``section 
1087rr of this title'' for ``section 1087ss of this title''.
    Subsec. (b)(5)(A). Pub. L. 100-50, Sec. 14(19), substituted 
``$2,100'' for ``$2,000''.
    Subsec. (b)(7). Pub. L. 100-50, Sec. 14(2), struck out ``National'' 
before ``Center''.
    Subsec. (c)(2)(B). Pub. L. 100-50, Sec. 14(3), substituted 
``displaced homemaker'' for ``dislocated homemaker''.
    Subsec. (c)(2)(C). Pub. L. 100-50, Sec. 14(1), (4), substituted 
``section 1087rr of this title'' for ``section 1087ss of this title'' in 
text, 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''.
------------------------------------------------------------------------

    Subsec. (c)(4)(B). Pub. L. 100-50, Sec. 14(5), substituted 
``$15,999'' for ``$15,000''.
    Subsec. (c)(4)(C). Pub. L. 100-50, Sec. 14(6), substituted 
``$16,000'' for ``$15,000'' in three places.
    Subsec. (d). Pub. L. 100-50, Sec. 14(1), (8), substituted ``section 
1087rr of this title'' for ``section 1087ss of this title'' in text and 
inserted a minus sign before ``$3,409'' in two places in table.


                    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 of Pub. L. 
105-244, set out as a note under section 1087kk of this title.


                    Effective Date of 1993 Amendment

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


                    Effective Date of 1992 Amendment

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


                    Effective Date of 1987 Amendment

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

                  Section Referred to in Other Sections

    This section is referred to in sections 1087nn, 1087rr, 1087ss of 
this title.
