United States Code

USC most recently checked for updates: Aug 14, 2020

§ 1087oo.
Family contribution for dependent students
(a)
Computation of expected family contribution
For each dependent student, the expected family contribution is equal to the sum of—
(1)
the parents’ contribution from adjusted available income (determined in accordance with subsection (b));
(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 income
The parents’ contribution from adjusted available income is equal to the amount determined by—
(1)
computing adjusted available income by adding—
(A)
the parents’ available income (determined in accordance with subsection (c)); 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)
(1)
In general
The parents’ available income is determined by deducting from total income (as defined in section 1087vv of this title)—
(A)
Federal income taxes;
(B)
an allowance for State and other taxes, determined in accordance with paragraph (2);
(C)
an allowance for social security taxes, determined in accordance with paragraph (3);
(D)
an income protection allowance, determined in accordance with paragraph (4);
(E)
an employment expense allowance, determined in accordance with paragraph (5); and
(F)
the amount of any tax credit taken by the parents under section 25A of title 26.
(2)
Allowance for State and other taxes

The allowance for State and other taxes is equal to an amount determined by multiplying total income (as defined in section 1087vv of this title) by a percentage determined according to the following table (or a successor table prescribed by the Secretary under section 1087rr of this title):

Percentages for Computation of State and Other Tax Allowance

If parents’ State or territory of residence is—

And parents’ total income is—

less than $15,000 or

$15,000 or more

then the percentage is—

Alaska, Puerto Rico, Wyoming

 3

 2

American Samoa, Guam, Louisiana, Nevada, Texas, Trust Territory, Virgin Islands

 4

 3

Florida, South Dakota, Tennessee, New Mexico

 5

 4

North Dakota, Washington

 6

 5

Alabama, Arizona, Arkansas, Indiana, Mississippi, Missouri, Montana, New Hampshire, Oklahoma, West Virginia

 7

 6

Colorado, Connecticut, Georgia, Illinois, Kansas, Kentucky

 8

 7

California, Delaware, Idaho, Iowa, Nebraska, North Carolina, Ohio, Pennsylvania, South Carolina, Utah, Vermont, Virginia, Canada, Mexico

 9

 8

Maine, New Jersey

10

 9

District of Columbia, Hawaii, Maryland, Massachusetts, Oregon, Rhode Island

11

10

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 earned by each parent multiplied by the social security withholding rate appropriate to the tax year of the earnings, up to the maximum statutory social security tax withholding amount for that same tax year.

(4)
Income protection allowance

The income protection allowance is determined by the following table (or a successor table prescribed by the Secretary under section 1087rr of this title):

Income Protection Allowance

Family Size

Number in College

(including student)

1

2

3

4

5

For each

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 using a successor provision prescribed by the Secretary under section 1087rr of this title):
(A)
If both parents were employed in the year for which their income is reported and both have their incomes reported in determining the expected family contribution, such allowance is equal to the lesser of $2,500 or 35 percent of the earned income of the parent with the lesser earned income.
(B)
If a parent qualifies as a surviving spouse or as a head of household as defined in section 2 of title 26, such allowance is equal to the lesser of $2,500 or 35 percent of such parent’s earned income.
(d)
Parents’ contribution from assets
(1)
In general
The parents’ contribution from assets is equal to—
(A)
the parental net worth (determined in accordance with paragraph (2)); minus
(B)
the education savings and asset protection allowance (determined in accordance with paragraph (3)); multiplied by
(C)
the asset conversion rate (determined in accordance with paragraph (4)), except that the result shall not be less than zero.
(2)
Parental net worth
The parental net worth is calculated by adding—
(A)
the current balance of checking and savings accounts and cash on hand;
(B)
the net value of investments and real estate, excluding the net value of the principal place of residence; and
(C)
the adjusted net worth of a business or farm, computed on the basis of the net worth of such business or farm (hereafter in this subsection referred to as “NW”), determined in accordance with the following table (or a successor table prescribed by the Secretary under section 1087rr of this title), except as provided under section 1087vv(f) of this title:

Adjusted Net Worth of a Business or Farm

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

The education savings and asset protection allowance is calculated according to the following table (or a successor table prescribed by the Secretary under section 1087rr of this title):

Education Savings and Asset Protection Allowances for Families and Students

If the age of the oldest parent is—

And there are

two parents

one parent

then the allowance is—

25 or less

 $  0

   $0

26

 2,200

 1,600

27

 4,300

 3,200

28

 6,500

(4)
Asset conversion rate

The asset conversion rate is 12 percent.

(e)
Assessment schedule

The adjusted available income (as determined under subsection (b)(1) and hereafter in this subsection referred to as “AAI”) is assessed according to the following table (or a successor table prescribed by the Secretary under section 1087rr of this title):

Parents’ Assessment From Adjusted Available Income (AAI)

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

(f)
Computations in case of separation, divorce, remarriage, or death
(1)
Divorced or separated parents
Parental income and assets for a student whose parents are divorced or separated is determined under the following procedures:
(A)
Include only the income and assets of the parent with whom the student resided for the greater portion of the 12-month period preceding the date of the application.
(B)
If the preceding criterion does not apply, include only the income and assets of the parent who provided the greater portion of the student’s support for the 12-month period preceding the date of application.
(C)
If neither of the preceding criteria apply, include only the income and assets of the parent who provided the greater support during the most recent calendar year for which parental support was provided.
(2)
Death of a parent
Parental income and assets in the case of the death of any parent is determined as follows:
(A)
If either of the parents has died, the student shall include only the income and assets of the surviving parent.
(B)
If both parents have died, the student shall not report any parental income or assets.
(3)
Remarried parents
If a parent whose income and assets are taken into account under paragraph (1) of this subsection, or if a parent who is a widow or widower and whose income is taken into account under paragraph (2) of this subsection, has remarried, the income of that parent’s spouse shall be included in determining the parent’s adjusted available income only if—
(A)
the student’s parent and the stepparent are married as of the date of application for the award year concerned; and
(B)
the student is not an independent student.
(g)
Student contribution from available income
(1)
In general
The student contribution from available income is equal to—
(A)
the student’s total income (determined in accordance with section 1087vv of this title); minus
(B)
the adjustment to student income (determined in accordance with paragraph (2)); multiplied by
(C)
the assessment rate as determined in paragraph (5);
except that the amount determined under this subsection shall not be less than zero.
(2)
Adjustment to student income
The adjustment to student income is equal to the sum of—
(A)
Federal income taxes of the student;
(B)
an allowance for State and other income taxes (determined in accordance with paragraph (3));
(C)
an allowance for social security taxes determined in accordance with paragraph (4);
(D)
an income protection allowance of 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)
(3)
Allowance for State and other income taxes

The allowance for State and other income taxes is equal to an amount determined by multiplying total income (as defined in section 1087vv of this title) by a percentage determined according to the following table (or a successor table prescribed by the Secretary under section 1087rr of this title):

Percentages for Computation of State and Other Tax Allowance

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

(4)
Allowance for social security taxes

The allowance for social security taxes is equal to the amount earned by the student multiplied by the social security withholding rate appropriate to the tax year of the earnings, up to the maximum statutory social security tax withholding amount for that same tax year.

(5)
Assessment of available income

The student’s available income (determined in accordance with paragraph (1) of this subsection) is assessed at 50 percent.

(6)
Allowance for parents’ negative available income

The allowance for parents’ negative available income is the amount, if any, by which the sum of the amounts deducted under subparagraphs (A) through (F) of subsection (c)(1) exceeds the sum of the parents’ total income (as defined in section 1087vv of this title) and the parents’ contribution from assets (as determined in accordance with subsection (d)).

(h)
Student contribution from assets

The student contribution from assets is determined by calculating the net assets of the student and multiplying such amount by 20 percent, except that the result shall not be less than zero.

(i)
Adjustments to parents’ contribution for enrollment periods other than 9 months for purposes other than subpart 2 of part A of this subchapter
For periods of enrollment other than 9 months, the parents’ contribution from adjusted available income (as determined under subsection (b)) 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

For periods of enrollment of less than 9 months, the student’s contribution from adjusted available income (as determined under subsection (g)) is determined, for purposes other than subpart 2 of part A, by dividing the amount determined under such subsection by 9, and multiplying the result by the number of months in the period of enrollment.

(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.)
cite as: 20 USC 1087oo