 
      CHAPTER 28--HIGHER EDUCATION RESOURCES AND STUDENT ASSISTANCE
 
                    SUBCHAPTER IV--STUDENT ASSISTANCE
 
                          Part E--Need Analysis
 
Sec. 1087ss. Simplified needs test


(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 1090(a) of this title for 
    families described in subsections (b) and (c) of 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) of this section, permit such family to submit 
        only the data elements required under subsection (b)(2) of this 
        section 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) of this section, 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) of this section.

(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 (and the student's spouse, if any) files 
            or is eligible to file a form described in paragraph (3) or 
            certifies that the student (and the student's spouse, if 
            any) is not required to file 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 six 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 1087oo(c)(2) of this title for dependent students and 
        in section 1087qq(b)(2) of this title for independent students 
        with dependents other than a spouse, or (B) for State and other 
        income taxes, as defined in section 1087pp(b)(2) of this title 
        for independent students without dependents other than a spouse.

                        (3) Qualifying forms

        A student or family files a form described in this subsection, 
    or subsection (c) of this section, as the case may be, if the 
    student or family, respectively, files--
            (A) a form 1040A or 1040EZ (including any prepared or 
        electronic version of such form) required pursuant to title 26;
            (B) a form 1040 (including any prepared or electronic 
        version of such form) required pursuant to title 26, except that 
        such form shall be considered a qualifying form only if the 
        student or family files such form in order to take a tax credit 
        under section 25A of title 26, and would otherwise be eligible 
        to file a form described in subparagraph (A); or
            (C) an income tax return (including any prepared or 
        electronic version of such 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 student's parents file, or are eligible to file, a 
        form described in subsection (b)(3) of this section, or certify 
        that the parents 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
            (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 
        1992 or the current year, whichever is higher, 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) files, or 
        is eligible to file, a form described in subsection (b)(3) of 
        this section, or certifies that the student (and the student's 
        spouse, if any) is not required to file an income tax return; 
        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 1992 or the current year, 
        whichever is higher, 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.

(Pub. L. 89-329, title IV, Sec. 479, as added Pub. L. 99-498, title IV, 
Sec. 406(a), Oct. 17, 1986, 100 Stat. 1472; amended Pub. L. 100-50, 
Sec. 14(23)-(25), June 3, 1987, 101 Stat. 352; Pub. L. 100-369, 
Sec. 7(c), July 18, 1988, 102 Stat. 837; Pub. L. 102-26, Sec. 11, Apr. 
9, 1991, 105 Stat. 129; Pub. L. 102-325, title IV, Sec. 471(a), July 23, 
1992, 106 Stat. 604; Pub. L. 103-208, Sec. 2(g)(10)-(15), Dec. 20, 1993, 
107 Stat. 2472; Pub. L. 105-244, title IV, Sec. 477, Oct. 7, 1998, 112 
Stat. 1731.)


                               Amendments

    1998--Subsec. (b)(3). Pub. L. 105-244, Sec. 477(1)(A), substituted 
``this subsection, or subsection (c) of this section, as the case may 
be,'' for ``this paragraph'' in introductory provisions.
    Subsec. (b)(3)(A). Pub. L. 105-244, Sec. 477(1)(B), struck out 
``or'' at end.
    Subsec. (b)(3)(B), (C). Pub. L. 105-244, Sec. 477(1)(C), (D), added 
subpar. (B) and redesignated former subpar. (B) as (C).
    Subsec. (c)(1)(A). Pub. L. 105-244, Sec. 477(2)(A), amended subpar. 
(A) generally. Prior to amendment, subpar. (A) read as follows: ``the 
student's parents were not required to file an income tax return under 
section 6012(a)(1) of title 26; and''.
    Subsec. (c)(2)(A). Pub. L. 105-244, Sec. 477(2)(B), amended subpar. 
(A) generally. Prior to amendment, subpar. (A) read as follows: ``the 
student (and the student's spouse, if any) was not required to file an 
income tax return under section 6012(a)(1) of title 26; and''.
    1993--Subsec. (a)(1). Pub. L. 103-208, Sec. 2(g)(10), inserted 
``of'' after ``(c)''.
    Subsec. (b)(1)(B)(i). Pub. L. 103-208, Sec. 2(g)(11), inserted 
``(and the student's spouse, if any)'' after ``student'' in two places 
and struck out ``such'' before ``an income tax return''.
    Subsec. (b)(2). Pub. L. 103-208, Sec. 2(g)(12), (13), substituted 
``six elements'' for ``five elements'' in introductory provisions and a 
comma for semicolon in subpar. (E).
    Subsec. (b)(3)(A). Pub. L. 103-208, Sec. 2(g)(14)(A), inserted 
``(including any prepared or electronic version of such form)'' before 
``required''.
    Subsec. (b)(3)(B). Pub. L. 103-208, Sec. 2(g)(14)(B), inserted 
``(including any prepared or electronic version of such return)'' before 
``required''.
    Subsec. (c)(1)(A). Pub. L. 103-208, Sec. 2(g)(15)(A), amended 
subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: 
``the student's parents did not file, and were not required to file, a 
form 1040 required pursuant to title 26; and''.
    Subsec. (c)(1)(B). Pub. L. 103-208, Sec. 2(g)(15)(C), inserted ``in 
1992 or the current year, whichever is higher,'' after ``that may be 
earned''.
    Subsec. (c)(2)(A). Pub. L. 103-208, Sec. 2(g)(15)(B), amended 
subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: 
``the student (and the student's spouse, if any) did not file, and was 
not required to file, a form 1040 required pursuant to title 26; and''.
    Subsec. (c)(2)(B). Pub. L. 103-208, Sec. 2(g)(15)(C), inserted ``in 
1992 or the current year, whichever is higher,'' after ``that may be 
earned''.
    1992--Pub. L. 102-325 amended section generally, substituting 
present provisions for provisions which related to: in subsec. (a), 
analysis applicable to all title IV programs; in subsec. (b), elements 
in tests; and in subsec. (c), simplified application form.
    1991--Subsec. (a). Pub. L. 102-26 inserted before period at end ``, 
or who file an income tax return pursuant to the tax code of the 
Commonwealth of Puerto Rico or who are not required to file pursuant to 
that tax code''.
    1988--Subsec. (a). Pub. L. 100-369 substituted ``Internal Revenue 
Code of 1986'' for ``Internal Revenue Code of 1954'', which for purposes 
of codification was translated as ``title 26'' thus requiring no change 
in text.
    1987--Subsec. (a). Pub. L. 100-50, Sec. 14(23), substituted 
``subsection (b) of this section'' for ``paragraph (2)'', ``families (1) 
who'' for ``families which'', and ``and (2) who file a form 1040A or 
1040EZ pursuant to title 26, or are not required to file pursuant to 
such title'' for ``and which file a form 1040A pursuant to title 26''.
    Subsec. (b)(2). Pub. L. 100-50, Sec. 14(24)(A), struck out ``and 
State'' after ``Federal''.
    Subsec. (b)(6). Pub. L. 100-50, Sec. 14(24)(B)-(D), added par. (6).
    Subsec. (c). Pub. L. 100-50, Sec. 14(25), added subsec. (c).


                    Effective Date of 1998 Amendment

    Amendment by Pub. L. 105-244 effective Oct. 7, 1998, 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 section 1090 of this title.
