<p><a href="http://www.nasfaa.org/SubHomes/2669Resources/HR2669Resources.html%5B/url%5D">http://www.nasfaa.org/SubHomes/2669Resources/HR2669Resources.html</a></p>
<p>this is a section of the nasfaa website devoted to news and other resources concerning h.r. 2669.</p>
<p>for those of you interested in the changes to the federal methodology, here it is:</p>
<p>New Law Makes Federal Methodology Changes</p>
<p>The College Cost Reduction and Access Act (P.L. 110-84), signed into law on Sept. 27, made a number of key changes to the student aid programs. While changes to the federal student loan programs have been covered widely in the press, this article focuses on changes to the Federal Methodology. The changes included in this portion of the law are effective on July 1, 2009.</p>
<p>Income Protection Allowance</p>
<p>Beginning with the 2009-10 award year, the new law provides for scheduled increases in the income protection allowance (IPA) for dependent students, independent students without dependents other than a spouse, and independent students with dependents other than a spouse. The law specifies IPA amounts through the 2012-2013 award year. For each academic year after 2012-2013, student IPAs will increase relative to the Consumer Price Index (CPI). Although no changes were made to IPA amounts for the parents of dependent students, a CPI-based updating method for parent IPAs is included for each academic year after 2008-09.</p>
<p>Simplified Needs Tests</p>
<p>Several changes to the simplified needs test (SNT) and automatic zero (auto zero) calculation formulas are effective beginning with the 2009-10 award year.</p>
<p>The modifications to the simplified needs test specify that:</p>
<pre><code>* A dependent student is eligible for the simplified needs test if one of the student's parents is a dislocated worker;
* An independent student is eligible for the simplified needs test if the student (or spouse) is a dislocated worker; and
* The time frame during which an individual may have received means-tested federal benefits to establish eligibility for the simplified needs test is extended from 12 to 24 months. This applies to both dependent and independent students.
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<p>"Dislocated worker" is defined in section 101 of the Workforce Investment Act of 1998.</p>
<p>The same changes (addition of dislocated worker criterion and increase to 24 months) are made for the automatic zero calculation. In addition, the maximum qualifying income level for the auto zero Expected Family Contribution (EFC) formula is increased from $20,000 to $30,000. The Secretary is required to update this figure annually according to increases in the Consumer Price Index.</p>
<p>Again, these changes are effective on July 1, 2009 for the 2009-10 award year.</p>
<p>Professional Judgment</p>
<p>Effective on July 1, 2009, financial aid administrators are given additional guidance under the authority commonly referred to as "professional judgment." The law makes three changes to the items listed in the law as examples of special circumstances that may warrant an adjustment in the calculation of an expected family contribution. These changes add the following items to examples of special circumstances:</p>
<pre><code>* An independent student's loss of employment;
* A family member who is a dislocated worker; and
* A change in the student's housing status that results in homelessness.
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<p>Definition Changes</p>
<p>The law makes changes to the definition of total income, untaxed income and benefits, the independent student definition, excludable income, includable assets, and other financial assistance for the period beginning July 1, 2009. Each of these items is described below.</p>
<pre><code>* "Total income" is amended to exclude distributions from qualified education benefits that are not subject to Federal income tax.
* The revised definition of untaxed income and benefits removes from consideration welfare benefits, the amount of the earned income tax credit, the credit for Federal tax on special fuels, the amount of foreign income excluded from Federal income taxes, and untaxed social security benefits. The amount of additional child tax credit claimed for Federal income tax purposes is specifically excluded.
* The independent student definition is modified to include students in foster care, emancipated minors or those in legal guardianship (as determined by the relevant state court), and students who are verified by a specified individual as an unaccompanied youth who is a homeless child or youth or as unaccompanied, at risk of homelessness, and self-supporting.
* Language has been added to the independent student definition to simplify the dependency override process. The new language specifies that a financial aid administrator may make a determination of independence based on a documented determination made - in the same award year - by another financial aid administrator.
* The term "excludable income" is expanded to include special combat pay, defined as pay received by a member of the Armed Forces because of exposure to a hazardous situation.
* The definition of assets is changed to state that a qualified education benefit is an asset of the parent if the student is a dependent student (regardless of whether the owner of the account is the student or the parent) or the student if the student is independent.
* The term "other financial assistance" is clarified to exclude distributions (that are not includable in gross income) from 529 plans, other state prepaid tuition plans, or Coverdell education savings accounts.
* Special combat pay is specifically excluded from estimated financial assistance for purposes of determining financial need.
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<p>Again, the changes described in this article are effective on July 1, 2009 for the 2009-10 award year.</p>