Education Department Updates Need Analysis

The “income protection allowances” (IPA) that will be used to calculate federal student aid need analysis for the 2016-17 award year will increase by about 1.5 percent, further increasing the differential between independent students with dependents other than a spouse and parents of dependent students.

As required by law, the Education Department annually recalculates the tables used in the statutory need analysis methodology based on changes to the need analysis formula and inflation. Updated tables were published May 27 in the Federal Register, Vol. 80, No. 101, pages 30217-30223.

This year’s increase in the IPA for all categories of students/parents is relatively small because inflation is relatively low. However, as seen in the chart below, the IPA for independent students with dependents other than a spouse ($25,210) continues to grow at a faster pace than the IPA for parents of dependent students ($17,840). The differential is now $7,370 for a family of two with one in college.

NAICU has been monitoring these annual updates since 2007, following changes made to the income protection allowance in the Higher Education Reconciliation Act (HERA) of 2005 and subsequently in the College Cost Reduction Act and Access Act of 2007 (CCRAA).  Prior to HERA, the IPA was identical for independent students with dependents other than a spouse and parents of dependent students.  NAICU has regularly brought this matter to the attention of education committee members in both the House and Senate.

For more information, please contact:
Maureen Budetti