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AGENCY:
Federal Student Aid, Department of Education.
ACTION:
Notice.
SUMMARY:
The Secretary announces the annual updates to the tables used in the statutory Federal Need Analysis Methodology (Need Analysis) that determines a student's Student Aid Index (SAI) for award year (AY) 2025-26 for student financial aid programs, Assistance Listing Numbers (ALN) 84.007, 84.033, 84.063, 84.268, and 84.379. The intent of this notice is to alert the financial aid community and the broader public to these required annual updates used in the determination of student aid eligibility.
FOR FURTHER INFORMATION CONTACT:
Heather Hall Lewis. Telephone: (202) 453-6519. Email: heather.halllewis@ed.gov.
If you are deaf, hard of hearing, or have a speech disability and wish to access telecommunications relay services, please dial 7-1-1.
SUPPLEMENTARY INFORMATION:
Part F of title IV of the Higher Education Act of 1965, as amended (HEA), specifies the criteria, data elements, calculations, and tables that make up the Need Analysis.
Enacted into law as part of the Consolidated Appropriations Act, 2021, Division FF, Title VII (116 Pub. L. 260), the FAFSA Simplification Act makes many significant changes to the Need Analysis, including how the Secretary must update the tables.
Section 478 of the HEA requires the Secretary to annually update the following five tables for inflation: the Income Protection Allowance (IPA), the Adjusted Net Worth (NW) of a Business or Farm, the Asset Protection Allowance, the Assessment Schedules and Rates, and the Employment Expense Allowance. The updates are based, in general, upon increases in items such as, but not limited to, the Consumer Price Index (CPI).
The Secretary updates the above tables to account for inflation that took place between April 2020 and April in the year prior to the beginning of each award year. The increases in the tables must be based on a percentage equal to the percentage increase in the Consumer Price Index for All Urban Consumers (CPI-U) for April of the applicable year.
This notice includes the 2025-26 AY values for the tables in sections 1 (Income Protection Allowance), 2 (Adjusted Net Worth of a Business or Farm), 3 (Asset Protection Allowance), 4 (Assessment Schedules and Rates), and 5 (Employment Expense Allowance).
1. Income Protection Allowance (IPA). This allowance is the amount of living expenses associated with the maintenance of an individual or family that offset the family's income. The allowance varies by family size and marital status. The IPA for dependent students is $11,510. The IPAs for parents of dependent students and independent students are listed in the tables below.
Parents of Dependent Students
| Family size | Income Protection Allowance |
|---|---|
| 2 | $28,530 |
| 3 | 35,510 |
| 4 | 43,870 |
| 5 | 51,750 |
| 6 | 60,540 |
| For each additional family member add $6,840. |
Married Independent Students With Dependents Other Than a Spouse
| Family size | Income Protection Allowance |
|---|---|
| 3 | $56,430 |
| 4 | 69,670 |
| 5 | 82,220 |
| 6 | 96,150 |
| For each additional family member add $10,860. |
Single Independent Students With Dependents Other Than a Spouse
| Family size | Income Protection Allowance |
|---|---|
| 2 | $53,710 |
| 3 | 66,880 |
| 4 | 82,570 |
| 5 | 97,440 |
| 6 | 113,950 |
| For each additional family member add $12,880. |
Independent Students Without Dependents Other Than a Spouse
| Marital status | Income Protection Allowance |
|---|---|
| Single | $17,890 |
| Married | 28,690 |
Adjusted Net Worth of a Business or Farm
| If the NW of a business or farm is | Then the adjusted NW is |
|---|---|
| Less than $1 | $0. |
| $1 to $170,000 | $0 + 40% of NW. |
| $170,001 to $510,000 | $68,000 + 50% of NW over $170,000. |
| $510,001 to $850,000 | $238,000 + 60% of NW over $510,000. |
| $850,001 or more | $442,000 + 100% of NW over $850,000. |
Parents of Dependent Students, Independent Students With Dependents Other Than a Spouse, and Independent Students Without Dependents Other Than a Spouse
| If the age of the older parent or the independent student is | And the older parent or the independent student is | |
|---|---|---|
| Married | Single | |
| Then the allowance is | ||
| 25 or less | 0 | 0 |
| 26 | 0 | 0 |
| 27 | 0 | 0 |
| 28 | 0 | 0 |
| 29 | 0 | 0 |
| 30 | 0 | 0 |
| 31 | 0 | 0 |
| 32 | 0 | 0 |
| 33 | 0 | 0 |
| 34 | 0 | 0 |
| 35 | 0 | 0 |
| 36 | 0 | 0 |
| 37 | 0 | 0 |
| 38 | 0 | 0 |
| 39 | 0 | 0 |
| 40 | 0 | 0 |
| 41 | 0 | 0 |
| 42 | 0 | 0 |
| 43 | 0 | 0 |
| 44 | 0 | 0 |
| 45 | 0 | 0 |
| 46 | 0 | 0 |
| 47 | 0 | 0 |
| 48 | 0 | 0 |
| 49 | 0 | 0 |
| 50 | 0 | 0 |
| 51 | 0 | 0 |
| 52 | 0 | 0 |
| 53 | 0 | 0 |
| 54 | 0 | 0 |
| 55 | 0 | 0 |
| 56 | 0 | 0 |
| 57 | 0 | 0 |
| 58 | 0 | 0 |
| 59 | 0 | 0 |
| 60 | 0 | 0 |
| 61 | 0 | 0 |
| 62 | 0 | 0 |
| 63 | 0 | 0 |
| 64 | 0 | 0 |
| 65 or older | 0 | 0 |
Assessment of Available Income
| If AAI is | Then the contribution is |
|---|---|
| Less than −$8,300 | −$1,826. |
| −$8,300 to $21,300 | 22% of AAI. |
| $21,301 to $26,700 | $4,686 + 25% of AAI over $21,300. |
| $26,701 to $32,000 | $6,036 + 29% of AAI over $26,700. |
| $32,001 to $37,500 | $7,573 + 34% of AAI over $32,000. |
| $37,501 to $42,900 | $9,443 + 40% of AAI over $37,500. |
| $42,901 or more | $11,603 + 47% of AAI over $42,900. |