USC - Family contribution for independent students without dependents other than a spouse

View all text of Part F [§ 1087kk - § 1087vv]

§ 1087pp. Family contribution for independent students without dependents other than a spouse

(a) Computation of expected family contributionFor 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)); and

(B) the family’s contribution from assets (determined in accordance with subsection (c));

(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 is requested; and

(3) for periods of enrollment of less than 9 months, for purposes other than subpart 2 of part A—

(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 generalThe 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 allowanceThe 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.

(1) In generalThe 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

except that the family’s contribution from assets shall not be less than zero.

(2) Family’s net worthThe 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):

(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.

(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; Pub. L. 116–260, div. FF, title VII, § 702(e), Dec. 27, 2020, 134 Stat. 3145.)