For each independent student with dependents other than a spouse, the expected family contribution is equal to the amount determined by—

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

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;

The family’s available income is determined by deducting from total income (as defined in section 1087vv of this title)—

The family’s available income is determined by deducting from total income (as defined in section 1087vv of this title)—

(A) Federal income taxes;

(B) an allowance for State and other taxes, determined in accordance with paragraph (2);

(C) an allowance for social security taxes, determined in accordance with paragraph (3);

(D) an income protection allowance, determined in accordance with paragraph (4);

(E) an employment expense allowance, determined in accordance with paragraph (5); and

(F) the amount of any tax credit taken under section 25A of title 26.

(2) Allowance for State and other taxes The allowance for State and other taxes is equal to an amount determined by multiplying total income (as defined in section 1087vv of this title) by a percentage determined according to the following table (or a successor table prescribed by the Secretary under section 1087rr of this title): Percentages for Computation of State and Other Tax Allowance If student’sor territory of residence is— And family’s total income is— less than $15,000 $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 estimated to be earned by the student (and spouse, if appropriate) multiplied by the social security withholding rate appropriate to the tax year preceding the award year, up to the maximum statutory social security tax withholding amount for that same tax year.

The 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 For academic year 2009–2010, the income protection allowance is determined by the following table: Income Protection Allowance Family Size Number in College (including ) 1 2 3 4 5 For each additional subtract: 2 $17,720 $14,690 3  22,060  19,050 $16,020 4  27,250  24,220  21,210 $18,170 5  32,150  29,120  26,100  23,070 $20,060 6  37,600  34,570  31,570  28,520  25,520  $3,020 For each additional add: 4,240 4,240 4,240 4,240 4,240

(B) Academic year 2010–2011 For academic year 2010–2011, the income protection allowance is determined by the following table: Income Protection Allowance Family Size Number in College (including ) 1 2 3 4 5 For each additional subtract: 2 $19,690 $16,330 3  24,510  21,160 $17,800 4  30,280  26,910  23,560 $20,190 5  35,730  32,350  29,000  25,640 $22,290 6  41,780  38,410  35,080  31,690  28,350 $3,350 For each additional add: 4,710 4,710 4,710 4,710 4,710

(C) Academic year 2011–2012 For academic year 2011–2012, the income protection allowance is determined by the following table: Income Protection Allowance Family Size Number in College (including ) 1 2 3 4 5 For each additional subtract: 2 $21,660 $17,960 3  26,960  23,280 $19,580 4  33,300  29,600  25,920 $22,210 5  39,300  35,590  31,900  28,200 $24,520 6  45,950  42,250  38,580  34,860  31,190 $3,690 For each additional add: 5,180 5,180 5,180 5,180 5,180

(D) Academic year 2012–2013 For academic year 2012–2013, the income protection allowance is determined by the following table: Income Protection Allowance Family Size Number in College (including ) 1 2 3 4 5 For each additional subtract: 2 $23,630 $19,590 3  29,420  25,400 $21,360 4  36,330  32,300  28,280 $24,230 5  42,870  38,820  34,800  30,770 $26,750 6  50,130  46,100  42,090  38,030  34,020 $4,020 For each additional add: 5,660 5,660 5,660 5,660 5,660

The employment expense allowance is determined as follows (or a successor table prescribed by the Secretary under section 1087rr of this title):

(A) If the student is married and the student’s spouse is employed in the year for which their income is reported, such allowance is equal to the lesser of $2,500 or 35 percent of the earned income of the student or spouse with the lesser earned income.

(B) If a student qualifies as a surviving spouse or as a head of household as defined in section 2 of title 26, such allowance is equal to the lesser of $2,500 or 35 percent of the student’s earned income.

The family’s contribution from assets is equal to—

The family’s contribution from assets is equal to—

(A) the family net worth (determined in accordance with paragraph (2)); minus

(B) the asset protection allowance (determined in accordance with paragraph (3)); multiplied by

(C) the asset conversion rate (determined in accordance with paragraph (4)), except that the result shall not be less than zero.

The family net worth is calculated by adding—

(A) the current balance of checking and savings accounts and cash on hand;

(B) the net value of investments and real estate, excluding the net value in the principal place of residence; and

(C) the adjusted net worth of a business or farm, computed on the basis of the net worth of such business or farm (hereafter referred to as “NW”), determined in accordance with the following table (or a successor table prescribed by the Secretary under section 1087rr of this title), except as provided under section 1087vv(f) of this title: Adjusted Net Worth of a Business or Farm If the net worth of a business or farm is— Then the adjusted net worth is— Less than $1 $0 $1–$75,000 40 percent of NW $75,001–$225,000 $30,000 plus 50 percent of NW over $75,000 $225,001–$375,000 $105,000 plus 60 percent of NW over $225,000 $375,001 or more $195,000 plus 100 percent of NW over $375,000

(3) Asset protection allowance The asset protection allowance is calculated according to the following table (or a successor table prescribed by the Secretary under section 1087rr of this title): Asset Protection Allowances for Families and Students If the age of the is— And the is married single then the allowance is— 25 or less  $  0    $0 26  2,200  1,600 27  4,300  3,200 28  6,500  4,700 29  8,600  6,300 30 10,800  7,900 31 13,000  9,500 32 15,100 11,100 33 17,300 12,600 34 19,400 14,200 35 21,600 15,800 36 23,800 17,400 37 25,900 19,000 38 28,100 20,500 39 30,200 22,100 40 32,400 23,700 41 33,300 24,100 42 34,100 24,700 43 35,000 25,200 44 35,700 25,800 45 36,600 26,300 46 37,600 26,900 47 38,800 27,600 48 39,800 28,200 49 40,800 28,800 50 41,800 29,500 51 43,200 30,200 52 44,300 31,100 53 45,700 31,800 54 47,100 32,600 55 48,300 33,400 56 49,800 34,400 57 51,300 35,200 58 52,900 36,200 59 54,800 37,200 60 56,500 38,100 61 58,500 39,200 62 60,300 40,300 63 62,400 41,500 64 64,600 42,800 65 or more 66,800 44,000

(4) Asset conversion rate The asset conversion rate is 7 percent.

The adjusted available income (as determined under subsection (a)(1) and hereafter referred to as “AAI”) is assessed according to the following table (or a successor table prescribed by the Secretary under section 1087rr of this title): Assessment From Adjusted Available Income (AAI) If AAI is— Then the assessment is— Less than −$3,409 −$750 −$3,409 to $9,400 22% of AAI $9,401 to $11,800 $2,068 + 25% of AAI over $9,400 $11,801 to $14,200 $2,668 + 29% of AAI over $11,800 $14,201 to $16,600 $3,364 + 34% of AAI over $14,200 $16,601 to $19,000 $4,180 + 40% of AAI over $16,600 $19,001 or more $5,140 + 47% of AAI over $19,000

In the case of a student who is divorced or separated, or whose spouse has died, the spouse’s income and assets shall not be considered in determining the family’s available income or assets.

(Pub. L. 89–329, title IV, § 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.)