Page:United States Statutes at Large Volume 94 Part 2.djvu/168

 94 STAT. 1446

"Effective family income."

38 USC 1651 et seq., 1700 et seq.

Regulations.

PUBLIC LAW 96-374—OCT. 3, 1980

whom the family may be reasonably expected to contribute for their postsecondary education. "(D) The amount of the assets of the student and the assets of the student's family. "(E) Any unusual expenses of the student or his family, such as unusual medical expenses and those which may arise from a catastrophe. "(F) Any educational expenses of other dependent children in the family. "(3) For purposes of subparagraph (A) of paragraph (2), the term 'effective family income' with respect to a student, means the annual adjusted family income, as determined in accordance with regulations prescribed by the Secretary, received by the parents or legal guardians of the student minus Federal, State and local taxes paid or payable with respect to such income, and includes any amount paid under the Social Security Act to, or on account of, the student which would not be paid if he were.not a student and one-half any amount paid the student under chapters 34 and 35 of title 38, United States Code. The term 'effective family income' includes any effective student income after any offset as determined by regulations prescribed by the Secretary. "(4) In determining the expected family contribution under this section for any academic year after academic year 1978-1979, an assessment rate of not more than 14 per centum shall be applied to parental discretionary income for families with adjusted gross family income which does not exceed $25,000 for each such year. The Secretary may set an assessment rate or a series of assessment rates to be applied to parental discretionary income for families with adjusted gross incomes which exceed $25,000 for each such year for income in excess of $25,000. "(5) For the purposes of paragraph (2)(D), the assets shall be determined by— "(A) excluding all equity in a single principal place of residence from the computation of assets; "(B) deducting an asset reserve of not less than $10,000 from the net value of all assets; and "(C) if net assets include farm or business assets, deducting an additional asset reserve of not less than $50,000 from the net assets. "(c)(1) The Secretary shall promulgate special regulations for determining the expected family contribution and effective family income of an independent student. Such special regulations shall be consistent with the basic criteria set forth in paragraph (2) of subsection (b). In addition, such regulations shall— "(A) provide that the portion of assets which shall be exempt from assessment for contribution for an independent student who has one or more dependents shall be the same as the portion so exempt for the family of a dependent student; "(B) provide that the rate of assessment for contribution on that portion of assets of such an independent student which is not exempt under subparagraph (A) shall be the same as the rate applied to the comparable portion of assets of the family of a dependent student; "(C) in establishing a portion of effective family income which shall be exempt from assessment for contribution by reason of subsistence requirements of independent students who have no dependents, use the same method for computation of such

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