20 U.S.C. § 1087pp - Family contribution for independent students without dependents other than a spouse

20 USC 1087pp - Family contribution for independent students without dependents other than a spouse

(a) Computation of expected family contribution 
For each independent student without dependents other than a spouse, the expected family contribution is determined by
(1) adding
(A) the familys contribution from available income (determined in accordance with subsection (b) of this section); and
(B) the familys contribution from assets (determined in accordance with subsection (c) of this section);
(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 and part C of subchapter I of chapter 34 of title 42 is requested; and
(3) for periods of enrollment of less than 9 months, for purposes other than subpart 2 of part A of this subchapter
(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 general 
The familys 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) $6,050 for single students;
(II) $6,050 for married students where both are enrolled pursuant to subsection (a)(2) of this section; and
(III) $9,700 for married students where one is enrolled pursuant to subsection (a)(2) of this section;
(v) in the case where a spouse is present, an employment expense allowance, as determined in accordance with paragraph (4); and
(vi) the amount of any tax credit taken under section 25A of title 26; and
(B) assessing such available income in accordance with paragraph (5).
(2) Allowance for State and other taxes 
The allowance for State and other taxes is equal to an amount determined by multiplying total income (as defined in section 1087vv of this title) by a percentage determined according to the following table (or a successor table prescribed by the Secretary under section 1087rr of this title):
(3) Allowance for social security taxes 
The allowance for social security taxes is equal to the amount earned by the student (and spouse, if appropriate), multiplied by the social security withholding rate appropriate to the tax year preceding the award year, up to the maximum statutory social security tax withholding amount for that same tax year.
(4) Employment expenses 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 the student is married and the students spouse is employed in the year for which income is reported, such allowance is equal to the lesser of $2,500 or 35 percent of the earned income of the student or spouse with the lesser earned income.
(B) If a student is not married, the employment expense allowance is zero.
(5) Assessment of available income 
The familys available income (determined in accordance with paragraph (1)(A) of this subsection) is assessed at 50 percent.
(c) Family contribution from assets 

(1) In general 
The familys contribution from assets is equal to
(A) the familys 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 familys contribution from assets shall not be less than zero.

(2) Family’s net worth 
The familys 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:
(3) Asset protection allowance 
The asset protection allowance is calculated according to the following table (or a successor table prescribed by the Secretary under section 1087rr of this title):
(4) Asset conversion rate 
The asset conversion rate is 20 percent.
(d) Computations in case of separation, divorce, or death 
In the case of a student who is divorced or separated, or whose spouse has died, the spouses income and assets shall not be considered in determining the familys contribution from income or assets.

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