81 FR 19153 - Annual Updates to the Income Contingent Repayment (ICR) Plan Formula for 2016-William D. Ford Federal Direct Loan Program
DEPARTMENT OF EDUCATION Federal Register Volume 81, Issue 64 (April 4, 2016)
Federal Register Volume 81, Issue 64 (April 4, 2016)
| Page Range | 19153-19157 | |
| FR Document | 2016-07517 |
[Federal Register Volume 81, Number 64 (Monday, April 4, 2016)] [Notices] [Pages 19153-19157] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-07517] ======================================================================= ----------------------------------------------------------------------- DEPARTMENT OF EDUCATION Annual Updates to the Income Contingent Repayment (ICR) Plan Formula for 2016--William D. Ford Federal Direct Loan Program AGENCY: Federal Student Aid, Department of Education. ACTION: Notice. ----------------------------------------------------------------------- Catalog of Federal Domestic Assistance (CFDA) Number: 84.063. SUMMARY: The Secretary announces the annual updates to the ICR plan formula for 2016, as required by 34 CFR 685.209(b)(1)(ii)(A), to give notice to Direct Loan borrowers and the public regarding how monthly ICR payment amounts will be calculated for the 2016-2017 year. DATES: The adjustments to the income percentage factors for the ICR plan formula contained in this notice are effective from July 1, 2016, to June 30, 2017, for any borrower who enters the ICR plan or has his or her monthly payment amount recalculated under the ICR plan during that period. FOR FURTHER INFORMATION CONTACT: Ian Foss, U.S. Department of Education, 830 First Street NE., Room 113H2, Washington, DC 20202. Telephone: (202) 377-3681 or by email: [email protected]. If you use a telecommunications device for the deaf or a text telephone, call the Federal Relay Service, toll free, at 1-800-877- 8339. SUPPLEMENTARY INFORMATION: Under the William D. Ford Federal Direct Loan (Direct Loan) Program, borrowers may choose to repay their non- defaulted loans (Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans made to graduate or professional students, and Direct Consolidation Loans) under the ICR plan. The ICR plan bases the borrower's repayment amount on the borrower's income, family size, loan amount, and the interest rate applicable to each of the borrower's loans. ICR is one of the income-driven repayment plans. Other income- driven repayment plans include the Income-Based Repayment (IBR) plan, the Pay As You Earn (PAYE) Repayment plan, and the Revised Pay As You Earn (REPAYE) Repayment plan. The IBR, PAYE, and REPAYE plans provide lower payment amounts than the ICR plan for most borrowers. A Direct Loan borrower who repays his or her loans under the ICR plan pays the lesser of: (1) The amount that he or she would pay over 12 years with fixed payments multiplied by an income percentage factor; or (2) 20 percent of discretionary income. Each year, to reflect changes in inflation, we adjust the income percentage factor used to calculate a borrower's ICR payment. We use the adjusted income percentage factors to calculate a borrower's monthly ICR payment amount when the borrower initially applies for the ICR plan or when the borrower submits his or her annual income documentation, as required under the ICR plan. This notice contains the adjusted income percentage factors for 2016, examples of how the monthly payment amount in ICR is calculated, and charts showing sample repayment amounts based on the adjusted ICR plan formula. This information is included in the following three attachments:Attachment 1--Income Percentage Factors for 2016 [[Page 19154]] Attachment 2--Examples of the Calculations of Monthly Repayment Amounts Attachment 3--Charts Showing Sample Repayment Amounts for Single and Married Borrowers In Attachment 1, to reflect changes in inflation, we have updated the income percentage factors that were published in the Federal Register on March 25, 2015 (80 FR 15757). Specifically, we have revised the table of income percentage factors by changing the dollar amounts of the incomes shown by a percentage equal to the estimated percentage change between the not-seasonally-adjusted Consumer Price Index for all urban consumers for December 2015 and December 2016. The income percentage factors reflected in Attachment 1 may cause a borrower's payments to be lower than they were in prior years, even if the borrower's income is the same as in the prior year. However, the revised repayment amount more accurately reflects the impact of inflation on the borrower's current ability to repay. Accessible Format: Individuals with disabilities can obtain this document in an accessible format (e.g., braille, large print, audiotape, or compact disc) on request to the contact person listed under FOR FURTHER INFORMATION CONTACT in this section of the notice. Electronic Access to This Document: The official version of this document is the document published in the Federal Register. Free Internet access to the official edition of the Federal Register and the Code of Federal Regulations is available via the Federal Digital System at: www.thefederalregister.org/fdsys. At this site, you can view this document, as well as all other documents of this Department published in the Federal Register, in text or Portable Document Format (PDF). To use PDF you must have Adobe Acrobat Reader, which is available free at the site. You may also access documents of the Department published in the Federal Register by using the article search feature at: www.federalregister.gov. Specifically, through the advanced search feature at this site, you can limit your search to documents published by the Department. Attachment 1--Income Percentage Factors for 2016 Income Percentage Factors for 2016 ------------------------------------------------------------------------ Single Married/head of ---------------------------------------------------- household -------------------- Income Factor Factor % Income % ------------------------------------------------------------------------ $11,382.................................. 55.00 $11,382 50.52 $15,662.................................. 57.79 $17,959 56.68 $20,152.................................. 60.57 $21,402 59.56 $24,745.................................. 66.23 $27,979 67.79 $29,131.................................. 71.89 $34,661 75.22 $34,661.................................. 80.33 $43,536 87.61 $43,536.................................. 88.77 $54,601 100.00 $54,602.................................. 100.00 $65,671 100.00 $65,671.................................. 100.00 $82,275 109.40 $78,929.................................. 111.80 $109,938 125.00 $101,065................................. 123.50 $148,672 140.60 $143,142................................. 141.20 $207,925 150.00 $164,125................................. 150.00 $339,766 200.00 $292,335................................. 200.00 ------------------------------------------------------------------------ Attachment 2--Examples of the Calculations of Monthly Repayment Amounts General notes about the examples in this attachment: We have a calculator that borrowers can use to estimate what their payment amount would be under the ICR plan. The calculator is called the ``Repayment Estimator'' and is available at StudentAid.gov/repayment-estimator. This calculator provides a detailed, individualized assessment of a borrower's loans and repayment plan options, including the ICR plan. The interest rates used in the examples are for illustration only. The actual interest rates on an individual borrower's Direct Loans depend on the loan type and when the postsecondary institution first disbursed the Direct Loan to the borrower. The Poverty Guideline amounts used in the examples are from the 2016 U.S. Department of Health and Human Services (HHS) Poverty Guidelines for the 48 contiguous States and the District of Columbia. Different Poverty Guidelines apply to residents of Alaska and Hawaii. The Poverty Guidelines for 2016 were published in the Federal Register on January 25, 2016 (81 FR 4036). All of the examples use an income percentage factor corresponding to an adjusted gross income (AGI) in the table in Attachment 1. If your AGI is not listed in the income percentage factors table in Attachment 1, calculate the applicable income percentage by following the instructions under the ``Interpolation'' heading later in this attachment. Married borrowers may repay their Direct Loans jointly under the ICR plan. If a married couple elects this option, we add the outstanding balance on the Direct Loans of each borrower and we add together both borrowers' AGIs to determine a joint ICR payment amount. We then prorate the joint payment amount for each borrower based on the proportion of that borrower's debt to the total outstanding balance. We bill each borrower separately. For example, if a married couple, John and Sally, has a total outstanding Direct Loan debt of $60,000, of which $40,000 belongs to John and $20,000 to Sally, we would apportion 67 percent of the monthly ICR payment to John and the remaining 33 percent to Sally. To take advantage of a joint ICR payment, married couples need not file taxes jointly; they may file separately and subsequently provide the other spouse's tax information to the borrower's Federal loan servicer. Calculating the Monthly Payment Amount Using a Standard Amortization and a 12-Year Repayment Period The formula to amortize a loan with a standard schedule (in which each payment is the same over the course of the repayment period) is as follows: M = P x < (I / 12) / [1 - {1 + (I / 12){time} [supcaret]-N] > In the formula-- M is the monthly payment amount; P is the outstanding principal balance of the loan at the time the calculation is performed; I is the annual interest rate on the loan, expressed as a decimal (for example, for a loan with an interest rate of 6 percent, 0.06); and N is the total number of months in the repayment period (for example, for a loan with a 12-year repayment period, 144 months). For example, assume that Billy has a $10,000 Direct Unsubsidized Loan with an interest rate of 6 percent. Step 1: To solve for M, first simplify the numerator of the fraction by which we multiply P, the outstanding principal balance. To do this divide I, the interest rate, as a decimal, by 12. In this example, Billy's interest rate is 6 percent. As a decimal, 6 percent is 0.06. 0.06 / 12 = 0.005 Step 2: Next, simplify the denominator of the fraction by which we multiply P. To do this divide I, the interest rate, as a decimal, by 12. Then, add one. Next, raise the sum of the two figures to the negative power that corresponds to the length of the repayment period in months. In this example, because we are amortizing a loan to calculate the monthly payment [[Page 19155]] amount under the ICR plan, the applicable figure is 12 years, which is 144 months. Finally, subtract the result from one. 0.06 / 12 = 0.005 1 + 0.005 = 1.005 1.005 [caret] -144 = 0.48762628 1 - 0.48762628 = 0.51237372 Step 3: Next, resolve the fraction by dividing the result from step one by the result from step two. 0.005 / 0.51237372 = 0.0097585 Step 4: Finally, solve for M, the monthly payment amount, by multiplying the outstanding principal balance of the loan by the result of step 3. $10,000 x 0.0097585 = $97.59 The remainder of the examples in this attachment will only show the results of the formula. Example 1. Brenda is single with no dependents and has $15,000 in Direct Subsidized and Unsubsidized Loans. The interest rate on Brenda's loans is 6 percent, and she has an AGI of $29,131. Step 1: Determine the total monthly payment amount based on what Brenda would pay over 12 years using standard amortization. To do this, use the formula that precedes Example 1. In this example, the monthly payment amount would be $146.38. Step 2: Multiply the result of Step 1 by the income percentage factor shown in the income percentage factors table (see Attachment 1 to this notice) that corresponds to Brenda's AGI. In this example, an AGI of $29,131 corresponds to an income percentage factor of 71.89 percent. 0.7189 x $146.38 = $105.23 Step 3: Determine 20 percent of Brenda's discretionary income and divide by 12 (discretionary income is AGI minus the HHS Poverty Guideline amount for a borrower's family size and State of residence). For Brenda, subtract the Poverty Guideline amount for a family of one from her AGI, multiply the result by 20 percent, and then divide by 12: $29,131-$11,880 = $17,251 $17,251 x 0.20 = $3,450.20 $3,450.20 / 12 = $287.52 Step 4: Compare the amount from Step 2 with the amount from Step 3. The lower of the two will be the monthly ICR payment amount. In this example, Brenda will be paying the amount calculated under Step 2 ($105.23). Note: Brenda would have a lower payment under other income- driven repayment plans. Specifically, Brenda's payment would be $89.31 under the PAYE and REPAYE repayment plans. However, Brenda's payment would be $133.96 under the IBR plan, which is higher than the payment she would have under the ICR plan. Example 2. Joseph is married to Susan and has no dependents. They file their Federal income tax return jointly. Joseph has a Direct Loan balance of $10,000, and Susan has a Direct Loan balance of $15,000. The interest rate on all of the loans is 6 percent. Joseph and Susan have a combined AGI of $82,275 and are repaying their loans jointly under the ICR plan (for general information regarding joint ICR payments for married couples, see the fifth and sixth bullets under the heading ``General notes about the examples in this attachment''). Step 1: Add Joseph's and Susan's Direct Loan balances to determine their combined aggregate loan balance: $10,000 + $15,000 = $25,000 Step 2: Determine the combined monthly payment amount for Joseph and Susan based on what both borrowers would pay over 12 years using standard amortization. To do this, use the formula that precedes Example 1. In this example, the combined monthly payment amount would be $243.96. Step 3: Multiply the result of Step 2 by the income percentage factor shown in the income percentage factors table (see Attachment 1 to this notice) that corresponds to Joseph and Susan's combined AGI. In this example, the combined AGI of $82,275 corresponds to an income percentage factor of 109.40 percent. 1.094 x $243.96 = $266.90 Step 4: Determine 20 percent of Joseph and Susan's combined discretionary income (discretionary income is AGI minus the HHS Poverty Guideline amount for a borrower's family size and State of residence). To do this subtract the Poverty Guideline amount for a family of two from the combined AGI, multiply the result by 20 percent, and divide by 12: $82,275-$ 16,020 = $66,225 $66,225 x 0.20 = $13,251 $13,251 / 12 = $1,104.25 Step 5: Compare the amount from Step 3 with the amount from Step 4. The lower of the two will be Joseph and Susan's joint monthly payment amount. Joseph and Susan will jointly pay the amount calculated under Step 3 ($266.90). Note: For Joseph and Susan, the Income-Contingent Repayment plan provides the lowest monthly payment of all of the income-driven repayment plans. Joseph and Susan would not be eligible for the IBR or Pay As You Earn Repayment plans, and would have a combined monthly payment under the REPAYE Repayment plan of $485.38. Step 6: Because Joseph and Susan are jointly repaying their Direct Loans under the ICR plan, the monthly payment amount calculated under Step 5 applies to both Joseph's and Susan's loans. To determine the amount for which each borrower will be responsible, prorate the amount calculated under Step 4 by each spouse's share of the combined Direct Loan debt. Joseph has a Direct Loan debt of $10,000 and Susan has a Direct Loan Debt of $15,000. For Joseph, the monthly payment amount will be: $10,000 / ($10,000 + $15,000) = 40 percent 0.40 x $266.90 = $106.76 For Susan, the monthly payment amount will be: $15,000 / ($10,000 + $15,000) = 60 percent 0.60 x $266.90 = $160.14 Example 3. David is single with no dependents and has $60,000 in Direct Subsidized and Unsubsidized Loans. The interest rate on all of the loans is 6 percent, and David's AGI is $34,661. Step 1: Determine the total monthly payment amount based on what David would pay over 12 years using standard amortization. To do this, use the formula that precedes Example 1. In this example, the monthly payment amount would be $585.51. Step 2: Multiply the result of Step 1 by the income percentage factor shown in the income percentage factors table (see Attachment 1 to this notice) that corresponds to David's AGI. In this example, an AGI of $34,661 corresponds to an income percentage factor of 80.33 percent. 0.8033 x $585.51 = $470.34 Step 3: Determine 20 percent of David's discretionary income and divide by 12 (discretionary income is AGI minus the HHS Poverty Guideline amount for a borrower's family size and State of residence). To do this subtract the Poverty Guideline amount for a family of one from David's AGI, multiply the result by 20 percent, then divide by 12: $34,661-$11,880 = $22,781 $22,781 x 0.20 = $4,556.20 $4,556.20 / 12 = $379.68 Step 4: Compare the amount from Step 2 with the amount from Step 3. The lower of the two will be David's monthly payment amount. In this example, David will be paying the amount calculated under Step 3 ($379.68). Note: David would have a lower payment under each of the other income-driven plans. Specifically, David's payment would be $140.34 under the PAYE and REPAYE repayment plans and $210.51 under the IBR plan. Interpolation. If an income is not included on the income percentage factor table, calculate the income percentage factor through linear interpolation. For example, assume that Joan is single with an income of $50,000. Step 1: Find the closest income listed that is less than Joan's income ($50,000) and the closest income listed that is greater than Joan's income ($50,000). Step 2: Subtract the lower amount from the higher amount (for this discussion we will call the result the ``income interval''): $54,602-$43,536 = $11,066 Step 3: Determine the difference between the two income percentage factors that correspond to the incomes used in Step 2 (for this discussion, we will call the result the ``income percentage factor interval''): 100.00 percent-88.77 percent = 11.23 percent Step 4: Subtract from Joan's income the closest income shown on the chart that is less than Joan's income of $50,000: $50,000-$43,536 = $6,464 Step 5: Divide the result of Step 4 by the income interval determined in Step 2: [[Page 19156]] $6,464 / $11,066 = 58.41 percent Step 6: Multiply the result of Step 5 by the income percentage factor interval: 11.23 percent x 58.41 percent = 6.56 percent Step 7: Add the result of Step 6 to the lower of the two income percentage factors used in Step 3 to calculate the income percentage factor interval for $50,000 in income: 6.56 percent + 88.77 percent = 95.33 percent (rounded to the nearest hundredth) The result is the income percentage factor that we will use to calculate Joan's monthly repayment amount under the ICR plan. Attachment 3--Charts Showing Sample Income-Driven Repayment Amounts for Single and Married Borrowers Below are two charts that provide first-year payment amount estimates for a variety of loan debt sizes and incomes under all of the income-driven repayment plans. The first chart is for single borrowers who have a family size of one. The second chart is for a borrower who is married or a head of household and who has a family size of three. The ICR plan calculations assume that the loan debt has an interest rate of 6 percent. For married borrowers, the calculations assume that the borrower files a joint Federal income tax return with his or her spouse. A field with a ``-'' character indicates that the borrower in the example would not be eligible to enter the applicable repayment based plan based on the borrower's income, loan debt, and family size. Sample First-Year Monthly Repayment Amounts for a Single Borrower -------------------------------------------------------------------------------------------------------------------------------------------------------- Family size = 1 ------------------------------------------------------------------------------- Income Plan Initial debt ------------------------------------------------------------------------------- $20,000 $40,000 $60,000 $80,000 $100,000 -------------------------------------------------------------------------------------------------------------------------------------------------------- $20,000................................... ICR......................... $118 $167 $195 $219 $240 IBR......................... 27 -- -- -- -- PAYE........................ 18 185 -- -- -- REPAYE...................... 18 185 352 518 685 $40,000................................... ICR......................... 135 333 390 439 480 IBR......................... 27 277 -- -- -- PAYE........................ 18 185 352 -- -- REPAYE...................... 18 185 352 518 685 $60,000................................... ICR......................... 135 469 586 658 720 IBR......................... 27 277 527 -- -- PAYE........................ 18 185 352 518 -- REPAYE...................... 18 185 352 518 685 $80,000................................... ICR......................... 135 469 781 877 960 IBR......................... 27 277 527 777 -- PAYE........................ 18 185 352 518 685 REPAYE...................... 18 185 352 518 685 $100,000.................................. ICR......................... 135 469 802 1,097 1,200 IBR......................... 27 277 527 777 1,027 PAYE........................ 18 185 352 518 685 REPAYE...................... 18 185 352 518 685 -------------------------------------------------------------------------------------------------------------------------------------------------------- Sample First-Year Monthly Repayment Amounts for a Married or Head-of-Household Borrower -------------------------------------------------------------------------------------------------------------------------------------------------------- Family size = 3 ------------------------------------------------------------------------------- Income Plan Initial debt ------------------------------------------------------------------------------- $20,000 $40,000 $60,000 $80,000 $100,000 -------------------------------------------------------------------------------------------------------------------------------------------------------- $20,000................................... ICR......................... $0 $161 $195 $211 $233 IBR......................... 0 122 -- -- -- PAYE........................ 0 81 -- -- -- REPAYE...................... 0 81 248 415 581 $40,000................................... ICR......................... 0 323 390 422 466 IBR......................... 0 122 372 -- -- PAYE........................ 0 81 248 415 -- REPAYE...................... 0 81 248 415 581 $60,000................................... ICR......................... 0 331 586 633 699 IBR......................... 0 122 372 622 -- PAYE........................ 0 81 248 415 581 REPAYE...................... 0 81 248 415 581 $80,000................................... ICR......................... 0 331 664 844 932 IBR......................... 0 122 372 622 872 PAYE........................ 0 81 248 415 581 REPAYE...................... 0 81 278 415 581 $100,000.................................. ICR......................... 0 469 664 997 1,165 IBR......................... 0 277 372 622 872 PAYE........................ 0 185 248 415 581 REPAYE...................... 0 185 248 415 581 -------------------------------------------------------------------------------------------------------------------------------------------------------- [[Page 19157]] Program Authority: 20 U.S.C. 1087 et seq. Dated: March 29, 2016. James W. Runcie, Chief Operating Officer, Federal Student Aid. [FR Doc. 2016-07517 Filed 4-1-16; 8:45 am] BILLING CODE 4000-01-P
![Federal Register / Vol. 81, No. 64 / Monday, April 4, 2016 / Notices 19153
proposed information collection; (c) Number of Respondents: 14,550. effective from July 1, 2016, to June 30,
ways to enhance the quality, utility, and Responses per Respondent: 2. 2017, for any borrower who enters the
clarity of the information to be Total Annual Responses: 29,100. ICR plan or has his or her monthly
collected; and (d) ways to minimize the Average Burden per Response: 15 payment amount recalculated under the
burden of the information collection on minutes. ICR plan during that period.
respondents, including through the use Frequency: Initially and every six
FOR FURTHER INFORMATION CONTACT: Ian
of automated collection techniques or months.
Foss, U.S. Department of Education, 830
other forms of information technology. Summary of Information Collection First Street NE., Room 113H2,
DATES: Consideration will be given to all Washington, DC 20202. Telephone:
The purpose of the WIC Overseas
comments received by June 3, 2016. program is to provide supplemental (202) 377–3681 or by email: ian.foss@
ADDRESSES: You may submit comments, foods and nutrition education to serve ed.gov.
identified by docket number and title, as an adjunct to good health care during If you use a telecommunications
by any of the following methods: critical times of growth and device for the deaf or a text telephone,
• Federal eRulemaking Portal: http:// development, in order to prevent the call the Federal Relay Service, toll free,
www.regulations.gov. Follow the occurrence of health problems, at 1–800–877–8339.
instructions for submitting comments. including drug and other substance SUPPLEMENTARY INFORMATION: Under the
• Mail: Department of Defense, Office abuse, and to improve the health status William D. Ford Federal Direct Loan
of the Deputy Chief Management of program participants. The benefit is (Direct Loan) Program, borrowers may
Officer, Directorate of Oversight and similar to the benefit provided under choose to repay their non-defaulted
Compliance, Regulatory and Audit the domestic WIC program. loans (Direct Subsidized Loans, Direct
Matters Office, 9010 Defense Pentagon, Respondents are individuals who are Unsubsidized Loans, Direct PLUS Loans
Washington, DC 20301–9010. dependents of members of the armed made to graduate or professional
Instructions: All submissions received forces stationed overseas, dependents of students, and Direct Consolidation
must include the agency name, docket a civilian employee of a military Loans) under the ICR plan. The ICR plan
number and title for this Federal department stationed overseas, and DoD bases the borrower’s repayment amount
Register document. The general policy contractors and their dependents on the borrower’s income, family size,
for comments and other submissions stationed overseas who desire to receive loan amount, and the interest rate
from members of the public is to make supplemental food and nutrition applicable to each of the borrower’s
these submissions available for public education services. To be eligible for the loans.
viewing on the Internet at http:// program, a person must meet specific
www.regulations.gov as they are ICR is one of the income-driven
income guidelines. In determining repayment plans. Other income-driven
received without change, including any income eligibility, the Department will
personal identifiers or contact repayment plans include the Income-
use the Department of Health and Based Repayment (IBR) plan, the Pay As
information. Human Services income poverty table
Any associated form(s) for this You Earn (PAYE) Repayment plan, and
for the state of Alaska. the Revised Pay As You Earn (REPAYE)
collection may be located within this
same electronic docket and downloaded Dated: March 29, 2016. Repayment plan. The IBR, PAYE, and
for review/testing. Follow the Aaron Siegel, REPAYE plans provide lower payment
instructions at http:// Alternate OSD Federal Register Liaison amounts than the ICR plan for most
www.regulations.gov for submitting Officer, Department of Defense. borrowers.
comments. Please submit comments on [FR Doc. 2016–07525 Filed 4–1–16; 8:45 am] A Direct Loan borrower who repays
any given form identified by docket BILLING CODE 5001–06–P his or her loans under the ICR plan pays
number, form number, and title. the lesser of: (1) The amount that he or
FOR FURTHER INFORMATION CONTACT: To
she would pay over 12 years with fixed
request more information on this DEPARTMENT OF EDUCATION payments multiplied by an income
proposed information collection or to percentage factor; or (2) 20 percent of
obtain a copy of the proposal and Annual Updates to the Income discretionary income.
associated collection instruments, Contingent Repayment (ICR) Plan Each year, to reflect changes in
please write to the Defense Health Formula for 2016—William D. Ford inflation, we adjust the income
Agency, TRICARE Overseas Program Federal Direct Loan Program percentage factor used to calculate a
Office, ATTN: Ms. Kimberly Stakes, borrower’s ICR payment. We use the
AGENCY: Federal Student Aid, adjusted income percentage factors to
7700 Arlington Boulevard, Suite 5101, Department of Education.
Falls Church, VA 22042–5101, or call calculate a borrower’s monthly ICR
ACTION: Notice. payment amount when the borrower
703–681–8690.
initially applies for the ICR plan or
SUPPLEMENTARY INFORMATION:
Catalog of Federal Domestic Assistance when the borrower submits his or her
Title; Associated Form; and OMB (CFDA) Number: 84.063.
Number: Women, Infants, and Children annual income documentation, as
Overseas Program (WIC Overseas) SUMMARY: The Secretary announces the required under the ICR plan. This notice
Eligibility Application: OMB Control annual updates to the ICR plan formula contains the adjusted income percentage
Number 0720–0030. for 2016, as required by 34 CFR factors for 2016, examples of how the
685.209(b)(1)(ii)(A), to give notice to monthly payment amount in ICR is
mstockstill on DSK4VPTVN1PROD with NOTICES
Needs and Uses: The information
collection requirement is necessary for Direct Loan borrowers and the public calculated, and charts showing sample
individuals to apply for certification regarding how monthly ICR payment repayment amounts based on the
and periodic recertification to receive amounts will be calculated for the adjusted ICR plan formula. This
WIC Overseas benefits. 2016–2017 year. information is included in the following
Affected Public: Individuals or DATES: The adjustments to the income three attachments:
Households. percentage factors for the ICR plan • Attachment 1—Income Percentage
Annual Burden Hours: 7,275. formula contained in this notice are Factors for 2016
VerDate Sep<11>2014 19:03 Apr 01, 2016 Jkt 238001 PO 00000 Frm 00042 Fmt 4703 Sfmt 4703 E:\FR\FM\04APN1.SGM 04APN1](https://thefederalregister.org/doc/81_FR_19217/page/1.svg)
![19154 Federal Register / Vol. 81, No. 64 / Monday, April 4, 2016 / Notices
• Attachment 2—Examples of the Attachment 1—Income Percentage • Married borrowers may repay their
Calculations of Monthly Repayment Factors for 2016 Direct Loans jointly under the ICR plan.
Amounts If a married couple elects this option,
• Attachment 3—Charts Showing INCOME PERCENTAGE FACTORS FOR we add the outstanding balance on the
Sample Repayment Amounts for 2016 Direct Loans of each borrower and we
add together both borrowers’ AGIs to
Single and Married Borrowers
Single Married/head determine a joint ICR payment amount.
In Attachment 1, to reflect changes in of household We then prorate the joint payment
inflation, we have updated the income Income Factor Factor amount for each borrower based on the
percentage factors that were published % Income proportion of that borrower’s debt to the
%
in the Federal Register on March 25, total outstanding balance. We bill each
2015 (80 FR 15757). Specifically, we $11,382 ...... 55.00 $11,382 50.52 borrower separately.
have revised the table of income $15,662 ...... 57.79 $17,959 56.68 • For example, if a married couple,
$20,152 ...... 60.57 $21,402 59.56 John and Sally, has a total outstanding
percentage factors by changing the $24,745 ...... 66.23 $27,979 67.79
dollar amounts of the incomes shown by Direct Loan debt of $60,000, of which
$29,131 ...... 71.89 $34,661 75.22 $40,000 belongs to John and $20,000 to
a percentage equal to the estimated $34,661 ...... 80.33 $43,536 87.61
percentage change between the not- $43,536 ...... 88.77 $54,601 100.00
Sally, we would apportion 67 percent of
$54,602 ...... 100.00 $65,671 100.00 the monthly ICR payment to John and
seasonally-adjusted Consumer Price
$65,671 ...... 100.00 $82,275 109.40 the remaining 33 percent to Sally. To
Index for all urban consumers for
$78,929 ...... 111.80 $109,938 125.00 take advantage of a joint ICR payment,
December 2015 and December 2016. $101,065 .... 123.50 $148,672 140.60 married couples need not file taxes
The income percentage factors $143,142 .... 141.20 $207,925 150.00 jointly; they may file separately and
reflected in Attachment 1 may cause a $164,125 .... 150.00 $339,766 200.00 subsequently provide the other spouse’s
borrower’s payments to be lower than $292,335 .... 200.00 tax information to the borrower’s
they were in prior years, even if the Federal loan servicer.
borrower’s income is the same as in the Attachment 2—Examples of the
Calculations of Monthly Repayment Calculating the Monthly Payment
prior year. However, the revised Amount Using a Standard Amortization
repayment amount more accurately Amounts
and a 12-Year Repayment Period
reflects the impact of inflation on the General notes about the examples in
borrower’s current ability to repay. this attachment: The formula to amortize a loan with
• We have a calculator that borrowers a standard schedule (in which each
Accessible Format: Individuals with payment is the same over the course of
disabilities can obtain this document in can use to estimate what their payment
amount would be under the ICR plan. the repayment period) is as follows:
an accessible format (e.g., braille, large M = P × < (I ÷ 12) ÷ [1 ¥ {1 + (I ÷ 12)}
print, audiotape, or compact disc) on The calculator is called the ‘‘Repayment
∧–N] >
Estimator’’ and is available at
request to the contact person listed
StudentAid.gov/repayment-estimator. In the formula—
under FOR FURTHER INFORMATION • M is the monthly payment amount;
This calculator provides a detailed,
CONTACT in this section of the notice. • P is the outstanding principal balance of
individualized assessment of a
Electronic Access to This Document: borrower’s loans and repayment plan the loan at the time the calculation is
performed;
The official version of this document is options, including the ICR plan. • I is the annual interest rate on the loan,
the document published in the Federal • The interest rates used in the expressed as a decimal (for example, for a
Register. Free Internet access to the examples are for illustration only. The loan with an interest rate of 6 percent,
official edition of the Federal Register actual interest rates on an individual 0.06); and
and the Code of Federal Regulations is borrower’s Direct Loans depend on the • N is the total number of months in the
available via the Federal Digital System loan type and when the postsecondary repayment period (for example, for a loan
institution first disbursed the Direct with a 12-year repayment period, 144
at: www.gpo.gov/fdsys. At this site, you months).
can view this document, as well as all Loan to the borrower.
other documents of this Department • The Poverty Guideline amounts For example, assume that Billy has a
published in the Federal Register, in used in the examples are from the 2016 $10,000 Direct Unsubsidized Loan with
text or Portable Document Format U.S. Department of Health and Human an interest rate of 6 percent.
Services (HHS) Poverty Guidelines for Step 1: To solve for M, first simplify
(PDF). To use PDF you must have
the 48 contiguous States and the District the numerator of the fraction by which
Adobe Acrobat Reader, which is we multiply P, the outstanding
available free at the site. of Columbia. Different Poverty
Guidelines apply to residents of Alaska principal balance. To do this divide I,
You may also access documents of the and Hawaii. The Poverty Guidelines for the interest rate, as a decimal, by 12. In
Department published in the Federal 2016 were published in the Federal this example, Billy’s interest rate is 6
Register by using the article search Register on January 25, 2016 (81 FR percent. As a decimal, 6 percent is 0.06.
feature at: www.federalregister.gov. 4036). • 0.06 ÷ 12 = 0.005
Specifically, through the advanced • All of the examples use an income Step 2: Next, simplify the
search feature at this site, you can limit percentage factor corresponding to an denominator of the fraction by which
your search to documents published by
mstockstill on DSK4VPTVN1PROD with NOTICES
adjusted gross income (AGI) in the table we multiply P. To do this divide I, the
the Department. in Attachment 1. If your AGI is not interest rate, as a decimal, by 12. Then,
listed in the income percentage factors add one. Next, raise the sum of the two
table in Attachment 1, calculate the figures to the negative power that
applicable income percentage by corresponds to the length of the
following the instructions under the repayment period in months. In this
‘‘Interpolation’’ heading later in this example, because we are amortizing a
attachment. loan to calculate the monthly payment
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![Federal Register / Vol. 81, No. 64 / Monday, April 4, 2016 / Notices 19157
Program Authority: 20 U.S.C. 1087 et seq. DATES: Deadline and Submission Dates: 2016–2017 award year or September 23,
Dated: March 29, 2016. See Tables A and B at the end of this 2017, whichever is earlier.
James W. Runcie, notice. In accordance with 34 CFR
Chief Operating Officer, Federal Student Aid. Table A—Deadline Dates by Which a 668.164(g)(4)(i), an institution may not
[FR Doc. 2016–07517 Filed 4–1–16; 8:45 am] Student Must Submit the FAFSA, by make a late disbursement of title IV
BILLING CODE 4000–01–P Which the Institution Must Receive the student assistance funds later than 180
Student’s Institutional Student days after the date of the institution’s
Information Record (ISIR) or Student determination that the student was no
DEPARTMENT OF EDUCATION Aid Report (SAR), and by Which the longer enrolled. Table A provides that,
Institution Must Submit Verification to make a late disbursement of title IV
Deadline Dates for Reports and Other Outcomes for Certain Students for the student assistance funds, an institution
Records Associated With the Free 2016–2017 Award Year must receive a valid ISIR or valid SAR
Application for Federal Student Aid no later than 180 days after its
(FAFSA®), the Federal Pell Grant Table A provides information and determination that the student was no
Program, the William D. Ford Federal deadline dates for receipt of the FAFSA, longer enrolled, but not later than
Direct Loan Program, the Teacher corrections to and signatures for the September 23, 2017.
Education Assistance for College and FAFSA, ISIRs, and SARs, and
verification documents. Table B—Pell Grant, Iraq and
Higher Education Grant Program, and
The deadline date for the receipt of a Afghanistan Service Grant, Direct Loan,
the Iraq and Afghanistan Service Grant
FAFSA by the Department’s Central and TEACH Grant Programs’ Deadline
Program for the 2016–2017 Award Year
Processing System is June 30, 2017, Dates for Disbursement Information by
AGENCY: Federal Student Aid, regardless of the method that the Institutions for the 2016–2017 Award
Department of Education. applicant uses to submit the FAFSA. Year or Processing Year
ACTION: Notice. The deadline date for the receipt of a
Table B provides the earliest and
signature page for the FAFSA (if
Catalog Federal Domestic Assistance (CFDA) latest dates for institutions to submit
required), correction, notice of change of
Numbers: 84.007 Federal Supplemental Pell Grant, Iraq and Afghanistan Service
address or school, or request for a
Educational Opportunity Grant (FSEOG) Grant, Direct Loan, and TEACH Grant
duplicate SAR is September 9, 2017.
Program; 84.033 Federal Work Study (FWS)
For all Federal student aid programs, disbursement records to the
Program; 84.038 Federal Perkins Loan Department’s Common Origination and
(Perkins Loan) Program; 84.063 Federal Pell an ISIR or SAR for the student must be
received by the institution no later than Disbursement (COD) System and
Grant (Pell Grant) Program; 84.268 William
D. Ford Federal Direct Loan (Direct Loan) the student’s last date of enrollment for deadline dates for such records if an
Program; 84.379 Teacher Education the 2016–2017 award year or September institution requests and receives
Assistance for College and Higher Education 23, 2017, whichever is earlier. As a approval to submit such records after
(TEACH) Grant Program; 84.408 Iraq and reminder, a FAFSA must be submitted the established deadline.
Afghanistan Service Grant Program. An institution must submit Pell Grant,
for the dependent student for whom a
SUMMARY: The Secretary announces parent is applying for a Direct PLUS Iraq and Afghanistan Service Grant,
deadline dates for the receipt of Loan. Direct Loan, and TEACH Grant
documents and other information from Verification documents must be disbursement records to COD, as
applicants and institutions participating received by the institution no later than applicable, no later than 15 days after
in certain Federal student aid programs 120 days after the student’s last date of making the disbursement or becoming
authorized under title IV of the Higher enrollment for the 2016–2017 award aware of the need to adjust a previously
Education Act of 1965, as amended year or September 23, 2017, whichever reported disbursement. In accordance
(HEA), for the 2016–2017 award year. is earlier. with 34 CFR 668.164(a), title IV funds
The Federal student aid programs For all Federal student aid programs are disbursed on the date that the
covered by this deadline date notice are except for (1) Direct PLUS Loans that institution: (a) Credits those funds to a
the Pell Grant, Direct Loan, TEACH will be made to parent borrowers, and student’s account in the institution’s
Grant, and Iraq and Afghanistan Service (2) Direct Unsubsidized Loans that will general ledger or any subledger of the
Grant programs. The FSEOG, FWS, and be made to dependent students who general ledger; or (b) pays those funds
Perkins Loan programs are only covered have been determined by the institution, to a student directly. Title IV funds are
by this deadline date notice to the pursuant to section 479A(a) of the HEA, disbursed even if an institution uses its
extent that a student receiving FSOEG, to be eligible for such a loan without own funds in advance of receiving
FWS, or Perkins Loan funds must providing parental information on the program funds from the Secretary.
submit a FAFSA, to the extent that the FAFSA, the ISIR or SAR must have an An institution’s failure to submit
institution must receive the student’s official expected family contribution disbursement records within the
Institutional Student Information (EFC) and must be received by the required timeframe may result in the
Record (ISIR) or Student Aid Report institution no later than the earlier of Secretary rejecting all or part of the
(SAR) for students requesting those the student’s last date of enrollment for reported disbursement. Such failure
funds, or to the extent that the the 2016–2017 award year or September may also result in an audit or program
institution must submit verification 23, 2017. review finding or the initiation of an
outcomes for students requesting those For a student who is requesting aid adverse action, such as a fine or other
mstockstill on DSK4VPTVN1PROD with NOTICES
funds. through the Pell Grant, FSEOG, FWS, penalty for such failure, in accordance
These programs, administered by the and Federal Perkins Loan programs or with subpart G of the General Provisions
U.S. Department of Education for a student requesting Direct regulations in 34 CFR part 668.
(Department), provide financial Subsidized Loans, who does not meet
Other Sources for Detailed Information
assistance to students attending eligible the conditions for a late disbursement
postsecondary educational institutions under 34 CFR 668.164(g), a valid ISIR or We publish a detailed discussion of
to help them pay their educational valid SAR must be received by the the Federal student aid application
costs. student’s last date of enrollment for the process in the 2016–2017 Federal
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Document Created: 2016-04-02 03:53:21
Document Modified: 2016-04-02 03:53:21
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| Action | Notice. | |
| Dates | The adjustments to the income percentage factors for the ICR plan formula contained in this notice are effective from July 1, 2016, to June 30, 2017, for any borrower who enters the ICR plan or has his or her monthly payment amount recalculated under the ICR plan during that period. | |
| Contact | Ian Foss, U.S. Department of Education, 830 First Street NE., Room 113H2, Washington, DC 20202. Telephone: (202) 377-3681 or by email: [email protected] | |
| FR Citation | 81 FR 19153 |
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