Collapse to view only § 1087uu. Disregard of student aid in other Federal programs
- § 1087kk. Amount of need
- § 1087ll. Cost of attendance
- § 1087mm. Family contribution
- § 1087nn. Determination of expected family contribution; data elements
- § 1087oo. Family contribution for dependent students
- § 1087pp. Family contribution for independent students without dependents other than a spouse
- § 1087qq. Family contribution for independent students with dependents other than a spouse
- § 1087rr. Regulations; updated tables
- § 1087ss. Simplified needs test
- § 1087tt. Discretion of student financial aid administrators
- § 1087uu. Disregard of student aid in other Federal programs
- § 1087uu-1. Native American students
- § 1087uu-2. Special rules for independent students
- § 1087vv. Definitions
§ 1087kk. Amount of need
Except as otherwise provided therein, the amount of need of any student for financial assistance under this subchapter (except subparts 1
1 So in original. Probably should be “subpart”.
1 or 2 of part A of this subchapter) is equal to—(1) the cost of attendance of such student, minus
(2) the expected family contribution for such student, minus
(3) estimated financial assistance not received under this subchapter (as defined in section 1087vv(j) of this title).
(Pub. L. 89–329, title IV, § 471, as added Pub. L. 99–498, title IV, § 406(a), Oct. 17, 1986, 100 Stat. 1454; amended Pub. L. 102–325, title IV, § 471(a), July 23, 1992, 106 Stat. 585; Pub. L. 105–244, title IV, § 480(a), Oct. 7, 1998, 112 Stat. 1732; Pub. L. 116–260, div. FF, title VII, § 702(a)(1), Dec. 27, 2020, 134 Stat. 3138; Pub. L. 117–103, div. R, § 102(b)(2), Mar. 15, 2022, 136 Stat. 819.)
§ 1087ll. Cost of attendanceFor the purpose of this subchapter, the term “cost of attendance” means—
(1) tuition and fees normally assessed a student carrying the same academic workload as determined by the institution, and including costs for rental or purchase of any equipment, materials, or supplies required of all students in the same course of study;
(2) an allowance for books, supplies, transportation, and miscellaneous personal expenses, including a reasonable allowance for the documented rental or purchase of a personal computer, for a student attending the institution on at least a half-time basis, as determined by the institution;
(3) an allowance (as determined by the institution) for room and board costs incurred by the student which—
(A) shall be an allowance determined by the institution for a student without dependents residing at home with parents;
(B) for students without dependents residing in institutionally owned or operated housing, shall be a standard allowance determined by the institution based on the amount normally assessed most of its residents for room and board;
(C) for students who live in housing located on a military base or for which a basic allowance is provided under section 403(b) of title 37, shall be an allowance based on the expenses reasonably incurred by such students for board but not for room; and
(D) for all other students shall be an allowance based on the expenses reasonably incurred by such students for room and board;
(4) for less than half-time students (as determined by the institution), tuition and fees and an allowance for only—
(A) books, supplies, and transportation (as determined by the institution);
(B) dependent care expenses (determined in accordance with paragraph (8)); and
(C) room and board costs (determined in accordance with paragraph (3)), except that a student may receive an allowance for such costs under this subparagraph for not more than 3 semesters or the equivalent, of which not more than 2 semesters or the equivalent may be consecutive;
(5) for a student engaged in a program of study by correspondence, only tuition and fees and, if required, books and supplies, travel, and room and board costs incurred specifically in fulfilling a required period of residential training;
(6) for incarcerated students only tuition and fees and, if required, books and supplies;
(7) for a student enrolled in an academic program in a program of study abroad approved for credit by the student’s home institution, reasonable costs associated with such study (as determined by the institution at which such student is enrolled);
(8) for a student with one or more dependents, an allowance based on the estimated actual expenses incurred for such dependent care, based on the number and age of such dependents, except that—
(A) such allowance shall not exceed the reasonable cost in the community in which such student resides for the kind of care provided; and
(B) the period for which dependent care is required includes, but is not limited to, class-time, study-time, field work, internships, and commuting time;
(9) for a student with a disability, an allowance (as determined by the institution) for those expenses related to the student’s disability, including special services, personal assistance, transportation, equipment, and supplies that are reasonably incurred and not provided for by other assisting agencies;
(10) for a student receiving all or part of the student’s instruction by means of telecommunications technology, no distinction shall be made with respect to the mode of instruction in determining costs;
(11) for a student engaged in a work experience under a cooperative education program, an allowance for reasonable costs associated with such employment (as determined by the institution);
(12) for a student who receives a loan under this or any other Federal law, or, at the option of the institution, a conventional student loan incurred by the student to cover a student’s cost of attendance at the institution, an allowance for the actual cost of any loan fee, origination fee, or insurance premium charged to such student or such parent on such loan, or the average cost of any such fee or premium charged by the Secretary, lender, or guaranty agency making or insuring such loan, as the case may be; and
(13) at the option of the institution, for a student in a program requiring professional licensure or certification, the one-time cost of obtaining the first professional credentials (as determined by the institution).
(Pub. L. 89–329, title IV, § 472, as added Pub. L. 99–498, title IV, § 406(a), Oct. 17, 1986, 100 Stat. 1454; amended Pub. L. 102–325, title IV, § 471(a), July 23, 1992, 106 Stat. 585; Pub. L. 103–208, § 2(g)(1), Dec. 20, 1993, 107 Stat. 2471; Pub. L. 105–244, title IV, § 471, Oct. 7, 1998, 112 Stat. 1729; Pub. L. 109–171, title VIII, § 8016, Feb. 8, 2006, 120 Stat. 172; Pub. L. 110–315, title IV, § 471(a), Aug. 14, 2008, 122 Stat. 3269; Pub. L. 116–260, div. FF, title VII, § 702(b), Dec. 27, 2020, 134 Stat. 3138; Pub. L. 117–103, div. R, § 103(a), Mar. 15, 2022, 136 Stat. 820.)
§ 1087mm. Family contribution
(a) In general
(b) Special rule
(1) In general
(2) ApplicabilityParagraph (1) shall apply to any dependent or independent student with respect to determinations of need for academic year 2009–2010 (in the case of a student who meets the requirement of subparagraph (B)(i)), or academic year 2018–2019 (in the case of a student who meets the requirement of subparagraph (B)(ii)), and succeeding academic years—
(A) who is eligible to receive a Federal Pell Grant for the academic year for which the determination is made;
(B) whose parent or guardian was—
(i) a member of the Armed Forces of the United States and died as a result of performing military service in Iraq or Afghanistan after September 11, 2001; or
(ii) actively serving as a public safety officer and died in the line of duty while performing as a public safety officer; and
(C) who, at the time of the parent or guardian’s death, was—
(i) less than 24 years of age; or
(ii) enrolled at an institution of higher education on a part-time or full-time basis.
(3) Information
(A) Armed Forces
(B) Public safety officersNotwithstanding any other provision of law, unless the Secretary establishes an alternate method to adjust the expected family contribution, for each student who meets the requirements of subparagraphs (A), (B)(ii), and (C) of paragraph (2), a financial aid administrator shall—
(i) verify with the student that the student is eligible for the adjustment;
(ii) adjust the expected family contribution in accordance with this subsection; and
(iii) notify the Secretary of the adjustment and the student’s eligibility for the adjustment.
(4) Treatment of Pell amount
(5) Definition of public safety officerFor purposes of this subsection, the term “public safety officer” means—
(A) a public safety officer, as defined in section 1204 of title I of the Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C. 3796b); 1 or
(B) a fire police officer, defined as an individual who—
(i) is serving in accordance with State or local law as an officially recognized or designated member of a legally organized public safety agency;
(ii) is not a law enforcement officer, a firefighter, a chaplain, or a member of a rescue squad or ambulance crew; and
(iii) provides scene security or directs traffic—(I) in response to any fire drill, fire call, or other fire, rescue, or police emergency; or(II) at a planned special event.
(Pub. L. 89–329, title IV, § 473, as added Pub. L. 99–498, title IV, § 406(a), Oct. 17, 1986, 100 Stat. 1455; amended Pub. L. 102–325, title IV, § 471(a), July 23, 1992, 106 Stat. 586; Pub. L. 105–244, title IV, § 480(b), Oct. 7, 1998, 112 Stat. 1732; Pub. L. 111–39, title IV, § 406(a)(1), July 1, 2009, 123 Stat. 1948; Pub. L. 115–141, div. H, title III, § 317, Mar. 23, 2018, 132 Stat. 753; Pub. L. 116–260, div. FF, title VII, § 702(b), Dec. 27, 2020, 134 Stat. 3138.)
§ 1087nn. Determination of expected family contribution; data elements
(a) General rule for determination of expected family contribution
The expected family contribution—
(1) for a dependent student shall be determined in accordance with section 1087oo of this title;
(2) for a single independent student or a married independent student without dependents (other than a spouse) shall be determined in accordance with section 1087pp of this title; and
(3) for an independent student with dependents other than a spouse shall be determined in accordance with section 1087qq of this title.
(b) Data elements
The following data elements are considered in determining the expected family contribution:
(1) the available income of (A) the student and the student’s spouse, or (B) the student and the student’s parents, in the case of a dependent student;
(2) the number of dependents in the family of the student;
(3) the number of dependents in the family of the student, 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 and for whom the family may reasonably be expected to contribute to their postsecondary education;
(4) the net assets of (A) the student and the student’s spouse, and (B) the student and the student’s parents, in the case of a dependent student;
(5) the marital status of the student;
(6) the age of the older parent, in the case of a dependent student, and the student; and
(7) the additional expenses incurred (A) in the case of a dependent student, when both parents of the student are employed or when the family is headed by a single parent who is employed, or (B) in the case of an independent student, when the student is married and the student’s spouse is employed, or when the employed student qualifies as a surviving spouse or as a head of a household under section 2 of title 26.
(Pub. L. 89–329, title IV, § 474, as added Pub. L. 99–498, title IV, § 406(a), Oct. 17, 1986, 100 Stat. 1456; amended Pub. L. 100–369, § 7(c), July 18, 1988, 102 Stat. 837; Pub. L. 102–325, title IV, § 471(a), July 23, 1992, 106 Stat. 587; Pub. L. 105–244, title IV, § 472, Oct. 7, 1998, 112 Stat. 1729; Pub. L. 116–260, div. FF, title VII, § 702(c), Dec. 27, 2020, 134 Stat. 3141.)
§ 1087oo. Family contribution for dependent students
(a) Computation of expected family contributionFor 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));
(2) the student contribution from available income (determined in accordance with subsection (g)); and
(3) the student contribution from assets (determined in accordance with subsection (h)).
(b) Parents’ contribution from adjusted available incomeThe 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)); and
(B) the parents’ contribution from assets (determined in accordance with subsection (d));
(2) assessing such adjusted available income in accordance with the assessment schedule set forth in subsection (e); 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 is requested;
except that the amount determined under this subsection shall not be less than zero.
(c) Parents’ available income
(1) In generalThe 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
(3) Allowance for social security taxes
(4) Income protection allowance
(5) Employment expense 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 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 generalThe 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 worthThe 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
(4) Asset conversion rate
(e) Assessment schedule
(f) Computations in case of separation, divorce, remarriage, or death
(1) Divorced or separated parentsParental 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 parentParental 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 parentsIf 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 generalThe 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 incomeThe 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
(4) Allowance for social security taxes
(5) Assessment of available income
(6) Allowance for parents’ negative available income
(h) Student contribution from assets
(i) Adjustments to parents’ contribution for enrollment periods other than 9 months for purposes other than subpart 2 of part A of this subchapterFor periods of enrollment other than 9 months, the parents’ contribution from adjusted available income (as determined under subsection (b)) 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)) is increased by the difference between the income protection allowance (determined in accordance with subsection (c)(4)) 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) and adjusted according to subsection (b)(3) 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
(Pub. L. 89–329, title IV, § 475, as added Pub. L. 99–498, title IV, § 406(a), Oct. 17, 1986, 100 Stat. 1456; amended Pub. L. 100–50, § 14(1)–(12), June 3, 1987, 101 Stat. 349, 350; Pub. L. 102–325, title IV, § 471(a), July 23, 1992, 106 Stat. 587; Pub. L. 103–208, § 2(g)(2)–(5), Dec. 20, 1993, 107 Stat. 2472; Pub. L. 105–78, title VI, § 609(g), Nov. 13, 1997, 111 Stat. 1523; Pub. L. 105–244, title IV, § 473, Oct. 7, 1998, 112 Stat. 1729; Pub. L. 109–171, title VIII, § 8017(a)(1), Feb. 8, 2006, 120 Stat. 173; Pub. L. 110–84, title VI, § 601(a), Sept. 27, 2007, 121 Stat. 801; Pub. L. 111–39, title IV, § 406(a)(2), July 1, 2009, 123 Stat. 1948; Pub. L. 116–260, div. FF, title VII, § 702(d), Dec. 27, 2020, 134 Stat. 3141; Pub. L. 118–40, div. B, § 101(a), Mar. 1, 2024, 138 Stat. 18.)
§ 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
(3) Allowance for social security taxes
(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
(c) Family contribution from assets
(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
(C) the asset conversion rate (determined in accordance with paragraph (4));
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
(4) Asset conversion rate
(d) Computations in case of separation, divorce, or death
(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.)
§ 1087qq. Family contribution for independent students with dependents other than a spouse
(a) Computation of expected family contributionFor 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)); and
(B) the family’s contribution from assets (determined in accordance with subsection (c));
(2) assessing such adjusted available income in accordance with an assessment schedule set forth in subsection (d);
(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 is requested; and
(4) 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 (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 generalThe 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
(3) Allowance for social security taxes
(4) Income protection allowanceThe income protection allowance is determined by the tables described in subparagraphs (A) through (D) (or a successor table prescribed by the Secretary under section 1087rr of this title).
(A) Academic year 2009–2010
(B) Academic year 2010–2011
(C) Academic year 2011–2012
(D) Academic year 2012–2013
(5) Employment expense allowanceThe 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 generalThe 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 worthThe 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
(4) Asset conversion rate
(d) Assessment schedule
(e) Computations in case of separation, divorce, or death
(Pub. L. 89–329, title IV, § 477, as added Pub. L. 99–498, title IV, § 406(a), Oct. 17, 1986, 100 Stat. 1465; amended Pub. L. 100–50, § 14(1)–(6), (8), (18), (19), June 3, 1987, 101 Stat. 349–351; Pub. L. 102–325, title IV, § 471(a), July 23, 1992, 106 Stat. 597; Pub. L. 103–208, § 2(g)(2), (7), Dec. 20, 1993, 107 Stat. 2472; Pub. L. 105–78, title VI, § 609(i), Nov. 13, 1997, 111 Stat. 1524; Pub. L. 105–244, title IV, § 475, Oct. 7, 1998, 112 Stat. 1730; Pub. L. 109–171, title VIII, § 8017(c)(1), Feb. 8, 2006, 120 Stat. 173; Pub. L. 110–84, title VI, § 601(c), Sept. 27, 2007, 121 Stat. 802; Pub. L. 111–39, title IV, § 406(a)(3), July 1, 2009, 123 Stat. 1948; Pub. L. 116–260, div. FF, title VII, § 702(f), Dec. 27, 2020, 134 Stat. 3147.)
§ 1087rr. Regulations; updated tables
(a) Authority to prescribe regulations restricted
(1) Notwithstanding any other provision of law, the Secretary shall not have the authority to prescribe regulations to carry out this part except—
(A) to prescribe updated tables in accordance with subsections (b) through (h) of this section; or
(B) to propose modifications in the need analysis methodology required by this part.
(2) Any regulation proposed by the Secretary that (A) updates tables in a manner that does not comply with subsections (b) through (h) of this section, or (B) that proposes modifications under paragraph (1)(B) of this subsection, shall not be effective unless approved by joint resolution of the Congress by May 1 following the date such regulations are published in the Federal Register in accordance with section 1089 of this title. If the Congress fails to approve such regulations by such May 1, the Secretary shall publish in the Federal Register in accordance with section 1089 of this title updated tables for the applicable award year that are prescribed in accordance with subsections (b) through (h) of this section.
(b) Income protection allowance
(1) Revised tables
(A) In general
(B) Table for independent students
(i) Academic years 2009–2010 through 2012–2013
(ii) Other academic years
(C) Table for parents
(2) Revised amounts
(c) Adjusted net worth of a farm or businessFor each award year after award year 1993–1994, the Secretary shall publish in the Federal Register a revised table of adjusted net worth of a farm or business for purposes of sections 1087oo(d)(2)(C), 1087pp(c)(2)(C), and 1087qq(c)(2)(C) of this title. Such revised table shall be developed—
(1) by increasing each dollar amount that refers to net worth of a farm or business by a percentage equal to the estimated percentage increase in the Consumer Price Index (as determined by the Secretary) between December 1992 and the December next preceding the beginning of such award year, and rounding the result to the nearest $5,000; and
(2) by adjusting the dollar amounts “$30,000”, “$105,000”, and “$195,000” to reflect the changes made pursuant to paragraph (1).
(d) Education savings and asset protection allowanceFor each award year after award year 1993–1994, the Secretary shall publish in the Federal Register a revised table of allowances for the purpose of sections 1087oo(d)(3), 1087pp(c)(3), and 1087qq(c)(3) of this title. Such revised table shall be developed by determining the present value cost, rounded to the nearest $100, of an annuity that would provide, for each age cohort of 40 and above, a supplemental income at age 65 (adjusted for inflation) equal to the difference between the moderate family income (as most recently determined by the Bureau of Labor Statistics), and the current average social security retirement benefits. For each age cohort below 40, the allowance shall be computed by decreasing the allowance for age 40, as updated, by one-fifteenth for each year of age below age 40 and rounding the result to the nearest $100. In making such determinations—
(1) inflation shall be presumed to be 6 percent per year;
(2) the rate of return of an annuity shall be presumed to be 8 percent; and
(3) the sales commission on an annuity shall be presumed to be 6 percent.
(e) Assessment schedules and ratesFor each award year after award year 1993–1994, the Secretary shall publish in the Federal Register a revised table of assessments from adjusted available income for the purpose of sections 1087oo(e) and 1087qq(d) of this title. Such revised table shall be developed—
(1) by increasing each dollar amount that refers to adjusted available income by a percentage equal to the estimated percentage increase in the Consumer Price Index (as determined by the Secretary) between December 1992 and the December next preceding the beginning of such academic year, rounded to the nearest $100; and
(2) by adjusting the other dollar amounts to reflect the changes made pursuant to paragraph (1).
(f) “Consumer Price Index” defined
(g) State and other tax allowance
(h) Employment expense allowance
(Pub. L. 89–329, title IV, § 478, as added Pub. L. 99–498, title IV, § 406(a), Oct. 17, 1986, 100 Stat. 1470; amended Pub. L. 100–50, § 14(20)–(22), June 3, 1987, 101 Stat. 351, 352;
§ 1087ss. Simplified needs test
(a) Simplified application section
(1) In general
(2) Reduced data requirementsThe simplified application form shall—
(A) in the case of a family meeting the requirements of subsection (b)(1), permit such family to submit only the data elements required under subsection (b)(2) 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), 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).
(b) Simplified needs test
(1) EligibilityAn 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—(I) file, or are eligible to file, a form described in paragraph (3);(II) certify that the parents are not required to file a Federal income tax return;(III) include at least one parent who is a dislocated worker; or(IV) received, or the student received, benefits at some time during the previous 24-month period under a means-tested Federal benefit program as defined under subsection (d); 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)—(I) files, or is eligible to file, a form described in paragraph (3);(II) certifies that the student (and the student’s spouse, if any) is not required to file a Federal income tax return;(III) is a dislocated worker or has a spouse who is a dislocated worker; or(IV) received benefits at some time during the previous 24-month period under a means-tested Federal benefit program as defined under subsection (d); and
(ii) the adjusted gross income of the student (and the student’s spouse, if any) is less than $50,000.
(2) Simplified test elementsThe 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 formsIn the case of an independent student, the student, or in the case of a dependent student, the family, files a form described in this subsection, or subsection (c), as the case may be, if the student or family, as appropriate, 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 contributionThe 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—
(i) file, or are eligible to file, a form described in subsection (b)(3);
(ii) certify that the parents are not required to file a Federal income tax return;
(iii) include at least one parent who is a dislocated worker; or
(iv) received, or the student received, benefits at some time during the previous 24-month period under a means-tested Federal benefit program as defined under subsection (d); and
(B) the sum of the adjusted gross income of the parents is less than or equal to $23,000; 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)—
(i) files, or is eligible to file, a form described in subsection (b)(3);
(ii) certifies that the student (and the student’s spouse, if any) is not required to file a Federal income tax return;
(iii) is a dislocated worker or has a spouse who is a dislocated worker; or
(iv) received benefits at some time during the previous 24-month period under a means-tested Federal benefit program as defined under subsection (d); and
(B) the sum of the adjusted gross income of the student and spouse (if appropriate) is less than or equal to $23,000.
An individual is not required to qualify or file for the earned income credit in order to be eligible under this subsection. The Secretary shall annually adjust the income level necessary to qualify an applicant for the zero expected family contribution. The income level shall be adjusted according to increases in the Consumer Price Index, as defined in section 1087rr(f) of this title.
(d) DefinitionsIn this section:
(1) Dislocated worker
(2) Means-tested Federal benefit programThe term “means-tested Federal benefit program” means a mandatory spending program of the Federal Government, other than a program under this subchapter, in which eligibility for the program’s benefits, or the amount of such benefits, are determined on the basis of income or resources of the individual or family seeking the benefit, and may include such programs as—
(A) the supplemental security income program under title XVI of the Social Security Act (42 U.S.C. 1381 et seq.);
(B) the supplemental nutrition assistance program under the Food and Nutrition Act of 2008 (7 U.S.C. 2011 et seq.);
(C) the free and reduced price school lunch program established under the Richard B. Russell National School Lunch Act (42 U.S.C. 1751 et seq.);
(D) the program of block grants for States for temporary assistance for needy families established under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.);
(E) the special supplemental nutrition program for women, infants, and children established by section 1786 of title 42; and
(F) other programs identified by the Secretary.
(Pub. L. 89–329, title IV, § 479, as added Pub. L. 99–498, title IV, § 406(a), Oct. 17, 1986, 100 Stat. 1472; amended Pub. L. 100–50, § 14(23)–(25), June 3, 1987, 101 Stat. 352; Pub. L. 100–369, § 7(c), July 18, 1988, 102 Stat. 837; Pub. L. 102–26, § 11, Apr. 9, 1991, 105 Stat. 129; Pub. L. 102–325, title IV, § 471(a), July 23, 1992, 106 Stat. 604; Pub. L. 103–208, § 2(g)(10)–(15), Dec. 20, 1993, 107 Stat. 2472; Pub. L. 105–244, title IV, § 477, Oct. 7, 1998, 112 Stat. 1731; Pub. L. 109–171, title VIII, § 8018(a), Feb. 8, 2006, 120 Stat. 174; Pub. L. 110–84, title VI, § 602(a), Sept. 27, 2007, 121 Stat. 804; Pub. L. 110–234, title IV, § 4002(b)(1)(A), (B), (2)(N), May 22, 2008, 122 Stat. 1095–1097; Pub. L. 110–246, § 4(a), title IV, § 4002(b)(1)(A), (B), (2)(N), June 18, 2008, 122 Stat. 1664, 1857, 1858; Pub. L. 111–39, title IV, § 406(a)(4), July 1, 2009, 123 Stat. 1948; Pub. L. 112–74, div. F, title III, § 309(b), Dec. 23, 2011, 125 Stat. 1100; Pub. L. 113–128, title V, § 512(n)(2), July 22, 2014, 128 Stat. 1710; Pub. L. 116–260, div. FF, title VII, § 702(h), Dec. 27, 2020, 134 Stat. 3152; Pub. L. 117–103, div. R, § 102(b)(3), Mar. 15, 2022, 136 Stat. 819.)
§ 1087tt. Discretion of student financial aid administrators
(a) In general
(b) Adjustments to assets taken into account
A student financial aid administrator shall be considered to be making a necessary adjustment in accordance with subsection (a) if—
(1) the administrator makes adjustments excluding from family income any proceeds of a sale of farm or business assets of a family if such sale results from a voluntary or involuntary foreclosure, forfeiture, or bankruptcy or an involuntary liquidation; or
(2) the administrator makes adjustments in the award level of a student with a disability so as to take into consideration the additional costs such student incurs as a result of such student’s disability.
(c) Refusal or adjustment of loan certifications
(Pub. L. 89–329, title IV, § 479A, as added Pub. L. 100–50, § 14(26), June 3, 1987, 101 Stat. 352; amended Pub. L. 101–239, title II, § 2009, Dec. 19, 1989, 103 Stat. 2122; Pub. L. 102–325, title IV, § 471(a), July 23, 1992, 106 Stat. 605; Pub. L. 103–208, § 2(g)(16), Dec. 20, 1993, 107 Stat. 2473; Pub. L. 105–244, title IV, § 478, Oct. 7, 1998, 112 Stat. 1731; Pub. L. 110–84, title VI, § 603(a), Sept. 27, 2007, 121 Stat. 805; Pub. L. 110–315, title IV, § 472(a), Aug. 14, 2008, 122 Stat. 3269; Pub. L. 113–128, title V, § 512(n)(3), July 22, 2014, 128 Stat. 1710; Pub. L. 116–260, div. FF, title VII, § 702(i), Dec. 27, 2020, 134 Stat. 3155.)
§ 1087uu. Disregard of student aid in other Federal programs
Notwithstanding any other provision of law, student financial assistance received under this subchapter, or under Bureau of Indian Affairs student assistance programs, shall not be taken into account in determining the need or eligibility of any person for benefits or assistance, or the amount of such benefits or assistance, under any Federal, State, or local program financed in whole or in part with Federal funds.
(Pub. L. 89–329, title IV, § 479B, as added Pub. L. 100–50, § 14(27), June 3, 1987, 101 Stat. 353; amended Pub. L. 102–325, title IV, § 471(a), July 23, 1992, 106 Stat. 606; Pub. L. 116–260, div. FF, title VII, § 702(j), Dec. 27, 2020, 134 Stat. 3160.)
§ 1087uu–1. Native American students
In determining family contributions for Native American students, computations performed pursuant to this part shall exclude—
(1) any income and assets of $2,000 or less per individual payment received by the student (and spouse) and student’s parents under Public Law 98–64 (25 U.S.C. 117a et seq.; 97 Stat. 365) (commonly known as the “Per Capita Act”) or the Indian Tribal Judgment Funds Use or Distribution Act (25 U.S.C. 1401 et seq.); and
(2) any income received by the student (and spouse) and student’s parents under the Alaska Native Claims Settlement Act (43 U.S.C. 1601 et seq.) or the Maine Indian Claims Settlement Act of 1980 (25 U.S.C. 1721 et seq.).1
1 See References in Text note below.
(Pub. L. 89–329, title IV, § 479C, as added Pub. L. 100–50, § 14(27), June 3, 1987, 101 Stat. 353; amended Pub. L. 102–325, title IV, § 471(a), July 23, 1992, 106 Stat. 606; Pub. L. 111–39, title IV, § 406(a)(5), July 1, 2009, 123 Stat. 1949; Pub. L. 116–260, div. FF, title VII, § 702(k), Dec. 27, 2020, 134 Stat. 3160.)
§ 1087uu–2. Special rules for independent students
(a) Determination process for unaccompanied homeless youthIn making a determination of independence under section 1087vv(d)(8) of this title, a financial aid administrator shall comply with the following:
(1) Consider documentation of the student’s circumstance to be adequate in the absence of documented conflicting information, if such documentation is provided through a documented phone call, written statement, or verifiable electronic data match by—
(A) a local educational agency homeless liaison, designated pursuant to section 11432(g)(1)(J)(ii) of title 42 or a designee of the liaison;
(B) the director of an emergency or transitional shelter, street outreach program, homeless youth drop-in center, or other program serving individuals who are experiencing homelessness, or a designee of the director;
(C) the director of a project supported by a Federal TRIO program or a Gaining Early Awareness and Readiness for Undergraduate program grant under division 1 or 2 of subpart 2 of part A, or a designee of the director; or
(D) a financial aid administrator at another institution who documented the student’s circumstance in the same or a prior award year.
(2) If a student is unable to provide documentation from any individual described in paragraph (1), make a case-by-case determination, which shall be—
(A) based on a written statement from, or a documented interview with, the student that confirms that the student is an unaccompanied homeless youth, or unaccompanied, at risk of homelessness, and self-supporting; and
(B) made without regard to the reasons that the student is an unaccompanied homeless youth, or unaccompanied, at risk of homelessness, and self-supporting.
(3) Consider a determination made under this subsection as distinct from a determination of independence under section 1087vv(d)(9) of this title.
(b) Documentation process for foster care youthIf an institution requires that a student provide documentation that the student was in foster care when the student was age 13 or older, a financial aid administrator shall consider any of the following as adequate documentation, in the absence of documented conflicting information:
(1) Submission of a court order or official State documentation that the student received Federal or State support in foster care.
(2) A documented phone call, written statement, or verifiable electronic data match, which confirms the student was in foster care at an applicable age, from—
(A) a State, county, or tribal agency administering a program under part B or E of title IV of the Social Security Act (42 U.S.C. 621 et seq. and 670 et seq.);
(B) a State Medicaid agency; or
(C) a public or private foster care placing agency or foster care facility or placement.
(3) A documented phone call or a written statement from an attorney, a guardian ad litem, or a Court Appointed Special Advocate that confirms that the student was in foster care at an applicable age and documents the person’s relationship to the student.
(4) Verification of the student’s eligibility for an education and training voucher under the John H. Chafee Foster Care Program under section 477 of the Social Security Act (42 U.S.C. 677).
(5) A documented phone call or written statement from a financial aid administrator who documented the student’s circumstance in the same or a prior award year.
(c) TimingA determination of independence under paragraph (2), (8), or (9) of section 1087vv(d) of this title for a student—
(1) shall be made as quickly as practicable;
(2) may be made as early as the year before the award year for which the student initially submits an application; and
(3) shall be made not later than 60 days after the date of the student’s enrollment during the award year for which the student initially submits an application.
(d) Use of earlier determinations
(1) Earlier determination by the institutionAny student who is determined to be independent under paragraph (2), (8), or (9) of section 1087vv(d) of this title for a preceding award year at an institution shall be presumed to be independent for each subsequent award year at the same institution unless—
(A) the student informs the institution that circumstances have changed; or
(B) the institution has specific conflicting information about the student’s independence and has informed the student of this information.
(2) Earlier determination by another institution
(e) Retention of documents
(Pub. L. 89–329, title IV, § 479D, as added Pub. L. 116–260, div. FF, title VII, § 702(l)(1), Dec. 27, 2020, 134 Stat. 3161; amended Pub. L. 117–103, div. R, § 103(b), Mar. 15, 2022, 136 Stat. 820.)
§ 1087vv. DefinitionsAs used in this part:
(a) Total income
(1)
(A) Except as provided in subparagraph (B) and paragraph (2), the term “total income” is equal to adjusted gross income plus untaxed income and benefits for the preceding tax year minus excludable income (as defined in subsection (e)).
(B) Notwithstanding section 1087rr(a) of this title, the Secretary may provide for the use of data from the second preceding tax year when and to the extent necessary to carry out the simplification of applications (including simplification for a subset of applications) used for the estimation and determination of financial aid eligibility. Such simplification may include the sharing of data between the Internal Revenue Service and the Department, pursuant to the consent of the taxpayer.
(2) No portion of any student financial assistance received from any program by an individual, no portion of veterans’ education benefits received by an individual, no portion of a national service educational award or post-service benefit received by an individual under title I of the National and Community Service Act of 1990 (42 U.S.C. 12511 et seq.), no portion of any tax credit taken under section 25A of title 26, and no distribution from any qualified education benefit described in subsection (f)(3) that is not subject to Federal income tax, shall be included as income or assets in the computation of expected family contribution for any program funded in whole or in part under this chapter.
(b) Untaxed income and benefits
(1) The term “untaxed income and benefits” means—
(A) child support received;
(B) workman’s compensation;
(C) veteran’s benefits such as death pension, dependency, and indemnity compensation, but excluding veterans’ education benefits as defined in subsection (c);
(D) interest on tax-free bonds;
(E) housing, food, and other allowances (excluding rent subsidies for low-income housing) for military, clergy, and others (including cash payments and cash value of benefits), except that the value of on-base military housing or the value of basic allowance for housing determined under section 403(b) of title 37 received by the parents, in the case of a dependent student, or the student or student’s spouse, in the case of an independent student, shall be excluded;
(F) cash support or any money paid on the student’s behalf, except, for dependent students, funds provided by the student’s parents;
(G) untaxed portion of pensions;
(H) payments to individual retirement accounts and Keogh accounts excluded from income for Federal income tax purposes; and
(I) any other untaxed income and benefits, such as Black Lung Benefits, Refugee Assistance, or railroad retirement benefits, or benefits received through participation in employment and training activities under title I of the Workforce Innovation and Opportunity Act [29 U.S.C. 3111 et seq.].
(2) The term “untaxed income and benefits” shall not include—
(A) the amount of additional child tax credit claimed for Federal income tax purposes;
(B) welfare benefits, including assistance under a State program funded under part A of title IV of the Social Security Act [42 U.S.C. 601 et seq.] and aid to dependent children;
(C) the amount of earned income credit claimed for Federal income tax purposes;
(D) the amount of credit for Federal tax on special fuels claimed for Federal income tax purposes;
(E) the amount of foreign income excluded for purposes of Federal income taxes; or
(F) untaxed social security benefits.
(c) Veteran and veterans’ education benefits
(1) The term “veteran” means any individual who—
(A) has engaged in the active duty in the United States Army, Navy, Air Force, Marines, or Coast Guard; and
(B) was released under a condition other than dishonorable.
(2) The term “veterans’ education benefits” means veterans’ benefits the student will receive during the award year, including but not limited to benefits under the following provisions of law:
(A) Chapter 103 of title 10 (Senior Reserve Officers’ Training Corps).
(B) Chapter 106A of title 10 (Educational Assistance for Persons Enlisting for Active Duty).
(C) Chapter 1606 of title 10 (Selected Reserve Educational Assistance Program).
(D) Chapter 1607 of title 10 (Educational Assistance Program for Reserve Component Members Supporting Contingency Operations and Certain Other Operations).
(E) Chapter 30 of title 38 (All-Volunteer Force Educational Assistance Program, also known as the “Montgomery GI Bill—active duty”).
(F) Chapter 31 of title 38 (Training and Rehabilitation for Veterans with Service-Connected Disabilities).
(G) Chapter 32 of title 38 (Post-Vietnam Era Veterans’ Educational Assistance Program).
(H) Chapter 33 of title 38 (Post-9/11 Educational Assistance).
(I) Chapter 35 of title 38 (Survivors’ and Dependents’ Educational Assistance Program).
(J) Section 903 of the Department of Defense Authorization Act, 1981 (10 U.S.C. 2141 note) (Educational Assistance Pilot Program).
(K) Section 156(b) of the “Joint Resolution making further continuing appropriations and providing for productive employment for the fiscal year 1983, and for other purposes” (42 U.S.C. 402 note) (Restored Entitlement Program for Survivors, also known as “Quayle benefits”).
(L) The provisions of chapter 3 of title 37, related to subsistence allowances for members of the Reserve Officers Training Corps.
(d) Independent student
(1) DefinitionThe term “independent”, when used with respect to a student, means any individual who—
(A) is 24 years of age or older by December 31 of the award year;
(B) is an orphan, in foster care, or a ward of the court, or was an orphan, in foster care, or a ward of the court at any time when the individual was 13 years of age or older;
(C) is, or was immediately prior to attaining the age of majority, an emancipated minor or in legal guardianship as determined by a court of competent jurisdiction in the individual’s State of legal residence;
(D) is a veteran of the Armed Forces of the United States (as defined in subsection (c)(1)) or is currently serving on active duty in the Armed Forces for other than training purposes;
(E) is a graduate or professional student;
(F) is a married individual;
(G) has legal dependents other than a spouse;
(H) has been verified during the school year in which the application is submitted as either an unaccompanied youth who is a homeless child or youth (as such terms are defined in section 725 of the McKinney-Vento Homeless Assistance Act [42 U.S.C. 11434a]), or as unaccompanied, at risk of homelessness, and self-supporting, by—
(i) a local educational agency homeless liaison, designated pursuant to section 722(g)(1)(J)(ii) of the McKinney-Vento Homeless Assistance Act [42 U.S.C. 11432(g)(1)(J)(ii)];
(ii) the director of a program funded under the Runaway and Homeless Youth Act [34 U.S.C. 11201 et seq.] or a designee of the director;
(iii) the director of a program funded under subtitle B of title IV of the McKinney-Vento Homeless Assistance Act [42 U.S.C. 11371 et seq.] (relating to emergency shelter grants) or a designee of the director; or
(iv) a financial aid administrator; or
(I) is a student for whom a financial aid administrator makes a documented determination of independence by reason of other unusual circumstances.
(2) Simplifying the dependency override process
(e) Excludable incomeThe term “excludable income” means—
(1) any student financial assistance awarded based on need as determined in accordance with the provisions of this part, including any income earned from work under part C of this subchapter;
(2) any income earned from work under a cooperative education program offered by an institution of higher education;
(3) any living allowance received by a participant in a program established under the National and Community Service Act of 1990 [42 U.S.C. 12501 et seq.];
(4) child support payments made by the student or parent;
(5) payments made and services provided under part E of title IV of the Social Security Act [42 U.S.C. 670 et seq.]; and
(6) special combat pay.
(f) Assets
(1) The term “assets” means cash on hand, including the amount in checking and savings accounts, time deposits, money market funds, trusts, stocks, bonds, other securities, mutual funds, tax shelters, qualified education benefits (except as provided in paragraph (3)), and the net value of real estate, income producing property, and business and farm assets.
(2) With respect to determinations of need under this subchapter, other than for subpart 4 of part A of this subchapter, the term “assets” shall not include the net value of—
(A) the family’s principal place of residence;
(B) a family farm on which the family resides; or
(C) a small business with not more than 100 full-time or full-time equivalent employees (or any part of such a small business) that is owned and controlled by the family.
(3) A qualified education benefit shall be considered an asset of—
(A) the student if the student is an independent student; or
(B) the parent if the student is a dependent student, regardless of whether the owner of the account is the student or the parent.
(4) In determining the value of assets in a determination of need under this subchapter (other than for subpart 4 of part A of this subchapter), the value of a qualified education benefit shall be—
(A) the refund value of any tuition credits or certificates purchased under a qualified education benefit; and
(B) in the case of a program in which contributions are made to an account that is established for the purpose of meeting the qualified higher education expenses of the designated beneficiary of the account, the current balance of such account.
(5) In this subsection:
(A) The term “qualified education benefit” means—
(i) a qualified tuition program (as defined in section 529(b)(1)(A) of title 26) or other prepaid tuition plan offered by a State; and
(ii) a Coverdell education savings account (as defined in section 530(b)(1) of title 26).
(B) The term “qualified higher education expenses” has the meaning given the term in section 529(e) of title 26.
(g) Net assets
(h) Treatment of income taxes paid to other jurisdictions
(1) The tax on income paid to the Governments of the Commonwealth of Puerto Rico, Guam, American Samoa, the Virgin Islands, or the Commonwealth of the Northern Mariana Islands, the Republic of the Marshall Islands, the Federated States of Micronesia, or Palau under the laws applicable to those jurisdictions, or the comparable tax paid to the central government of a foreign country, shall be treated as Federal income taxes.
(2) References in this part to title 26, Federal income tax forms, and the Internal Revenue Service shall, for purposes of the tax described in paragraph (1), be treated as references to the corresponding laws, tax forms, and tax collection agencies of those jurisdictions, respectively, subject to such adjustments as the Secretary may provide by regulation.
(i) Current balance
(j) Other financial assistance
(1) For purposes of determining a student’s eligibility for funds under this subchapter, estimated financial assistance not received under this subchapter shall include all scholarships, grants, loans, or other assistance known to the institution at the time the determination of the student’s need is made, including national service educational awards or post-service benefits under title I of the National and Community Service Act of 1990 (42 U.S.C. 12511 et seq.), but excluding veterans’ education benefits as defined in subsection (c).
(2) Notwithstanding paragraph (1), a tax credit taken under section 25A of title 26, or a distribution that is not includable in gross income under section 529 of such title, under another prepaid tuition plan offered by a State, or under a Coverdell education savings account under section 530 of such title, shall not be treated as estimated financial assistance for purposes of section 1087kk(3) of this title.
(3) Notwithstanding paragraph (1) and section 1087ll of this title, assistance not received under this subchapter may be excluded from both estimated financial assistance and cost of attendance, if that assistance is provided by a State and is designated by such State to offset a specific component of the cost of attendance. If that assistance is excluded from either estimated financial assistance or cost of attendance, it shall be excluded from both.
(4) Notwithstanding paragraph (1), special combat pay shall not be treated as estimated financial assistance for purposes of section 1087kk(3) of this title.
(k) Dependents
(1) Except as otherwise provided, the term “dependent of the parent” means the student, dependent children of the student’s parents, including those children who are deemed to be dependent students when applying for aid under this subchapter, and other persons who live with and receive more than one-half of their support from the parent and will continue to receive more than half of their support from the parent during the award year.
(2) Except as otherwise provided, the term “dependent of the student” means the student’s dependent children and other persons (except the student’s spouse) who live with and receive more than one-half of their support from the student and will continue to receive more than half of their support from the student during the award year.
(l) Family size
(1) In determining family size in the case of a dependent student—
(A) if the parents are not divorced or separated, family members include the student’s parents, and the dependents of the student’s parents including the student;
(B) if the parents are divorced or separated, family members include the parent whose income is included in computing available income and that parent’s dependents, including the student; and
(C) if the parents are divorced and the parent whose income is so included is remarried, or if the parent was a widow or widower who has remarried, family members also include, in addition to those individuals referred to in subparagraph (B), the new spouse and any dependents of the new spouse if that spouse’s income is included in determining the parents’ adjusted available income.
(2) In determining family size in the case of an independent student—
(A) family members include the student, the student’s spouse, and the dependents of the student; and
(B) if the student is divorced or separated, family members do not include the spouse (or ex-spouse), but do include the student and the student’s dependents.
(m) Business assets
(n) Special combat pay
(Pub. L. 89–329, title IV, § 480, as added Pub. L. 99–498, title IV, § 406(a), Oct. 17, 1986, 100 Stat. 1472; amended Pub. L. 100–50, § 14(28), June 3, 1987, 101 Stat. 353; Pub. L. 100–369, § 7(b), July 18, 1988, 102 Stat. 837; Pub. L. 101–610, title I, § 185(3), (4), Nov. 16, 1990, 104 Stat. 3168; Pub. L. 102–325, title IV, § 471(a), July 23, 1992, 106 Stat. 606; Pub. L. 103–82, title I, § 102(c)(4), (5), Sept. 21, 1993, 107 Stat. 824; Pub. L. 103–208, § 2(g)(17)–(20), Dec. 20, 1993, 107 Stat. 2474; Pub. L. 104–193, title I, § 110(h)(2), Aug. 22, 1996, 110 Stat. 2172; Pub. L. 105–78, title VI, § 609(j), (k), Nov. 13, 1997, 111 Stat. 1524; Pub. L. 105–244, title IV, § 479, Oct. 7, 1998, 112 Stat. 1732; Pub. L. 105–277, div. A, § 101(f) [title VIII, § 405(d)(15)(B), (f)(12)(B)], Oct. 21, 1998, 112 Stat. 2681–337, 2681–421, 2681–431; Pub. L. 109–171, title VIII, § 8019, Feb. 8, 2006, 120 Stat. 176; Pub. L. 110–84, title VI, § 604(a), Sept. 27, 2007, 121 Stat. 806; Pub. L. 110–153, § 1(a), Dec. 21, 2007, 121 Stat. 1824; Pub. L. 110–315, title IV, § 473(a)–(e), Aug. 14, 2008, 122 Stat. 3270, 3271; Pub. L. 111–39, title IV, § 406(a)(6)–(8), July 1, 2009, 123 Stat. 1949, 1950; Pub. L. 113–128, title V, § 512(n)(4), July 22, 2014, 128 Stat. 1710; Pub. L. 116–260, div. FF, title VII, § 702(l)(2), Dec. 27, 2020, 134 Stat. 3163.)