those parents who choose not to claim a student as a tax exemption during the base year in order to qualify the student as an independent applicant, the Office of Education undertook steps to develop a revised definition which would be responsive to these issues. As part of this effort, the Office of Education solicited the advice and counsel of the financial aid community by issuing a notice of intent in the Federal Register on November 29, 1976. The public was invited to comment on the definition in its current form and to suggest any changes which would reinforce the concept that the primary responsibility for financing the cost of postsecondary education rests with the student and his parents, without penalizing the truly independent student and without being unduly difficult to administer. All comments which were received, both by mail and at the five hearings held in various cities, were given careful consideration before the proposed modification of the definition was drafted. In addition, the Office of Education held an invitational seminar attended by representatives of the financial aid community to discuss possible alternatives for a changed definition of the independent student. In response to public comments and discussions, the Office of Education issued the proposed regulation which reflected the general consensus of comments received at that time. Specifically, the major proposed modifications to the current definition of the independent student are to: 1. Extend the Federal tax exemption criteria to apply for two calendar years prior to the year for which aid is requested, rather than one calendar year. 2. Extend the number of weeks an independent student may reside with his parents during the year for which aid is requested and the prior calendar year from two weeks to six weeks. Addi Shortly after its publication in the Federal Register copies of the proposed revision were mailed to all institutions participating in the Basic Grants and campus-based aid programs, and comments were solicited. tionally, institutional representatives, students, and any other interested parties were invited to present their views at a hearing here in Washington on August 8. As might be expected with such a controversial topic, the proposed revision of the independent student definition has generated a good deal of response. While diverse opinions have been expressed on the content of the revision, the commenters representing the major educational associations and national need analysis services have been unanimous on one point. All of them agree that the current definition should remain in effect for the 1978-79 aca demic year and that any changes which ultimately are made in the definition should not become effective until the 1979-80 academic year. The reason for the apparent unanimity on this point stems from the time requirements necessary for the publication of institutional catalogues, financial aid applications, brochures, and other informational documents which include the independent student criteria. According to the information provided by the commenters, many institutions have already begun to prepare these items for the 1978-79 academic year. Additionally, national need analysis services, State agencies, and other non-Federal student aid programs have begun to develop their forms and implement their procedures for 1978-79. Commenters representing these institutions and organizations indicated that a change in the definition for 1978-79 at this time would create serious administrative difficulties. Thus, they urged that the implementation of any changes be postponed until 1979-80, and that the final regulation be published with a liberal period of lead time in which forms, publications, and program procedures could be modified. In responding to this widely expressed concern, we will postpone the implementation of any changes which are ultimately made in the independent student definition until the 1979-80 academic year. This delay will provide additional time to study public response in order to insure that the final regulation on the definition reflects the consensus of the financial aid community. Additionally, we shall publish the definition far enough in advance of the beginning of that academic year to permit the necessary changes to be made with as little inconvenience to institutions as possible. To provide you with additional information concerning the independent student segment of the Basic Grant applicant population, I am submitting for the record several statistical tables. These are included as Figures, 2, 4, and 5 in Appendix A. 97-379 - 78 - 4 These tables provide a summary of independent student characteristics for the 1976-77 Basic Grant applicant population. We should like to note that this program data does not permit a precise assessment of the impact on the student population of the proposed amendments to this definition. To the best of our knowledge, such data is currently not available. At the same time, however, some general observations on the impact of proposed definition may still be made. Specifically, program data indicates that about 70 percent of all independent applicants are 23 years of age or older. Given this age level, it is reasonable to assume that this category of independent applicants are least likely to be affected by the proposed definition as the vast majority of these students can be expected to have been truly selfsupporting for a considerable period of time. On the other hand, some 30 percent of the independent applicants are 22 years of age or younger. During the 1976-77 academic year, about 370,000 of the independent applicants fell in this age category. Obviously, the proposed definition would more directly affect this category of applicants in the sense that a certain proportion of these applicants would be considered as dependent on parental resources under the proposed rule. At the same time, it is our view that the temptation to trade off a tax exemption for increased student aid is strongest for parents of students in this age category, since these younger students are more likely to be receiving support from their parents. The proposed regulation, while admittedly not eliminating this problem, will certainly make it more difficult to establish independent student status through advance planning on the part of the student and his parents. ASSET RESERVES FOR FARMERS AND BUSINESSMEN In concluding my remarks today, there is one item I should like to mention briefly concerning the asset reserves in the Family Contribution Schedules as they may be affected by the pending appropriation bill. As you know, the Family Contribution Schedule for dependent students includes a reserve of $12,500 against asset equity before any assessment of a family's assets is made. Since there is an additional $12,500 reserve against farm and business assets, the total asset reserve for the farmer or business owner can be as much as $25,000. The HEW-Labor appropriation bill includes in the Basic Grant appropriation $90 million intended specifically by the appropriation committee to be used to raise the reserves against reported assets above their current levels. Fifty million of this amount has been designated to be used to raise the asset reIt is my understanding that the intent of serves for farmers and businessmen. the committee was that the sum of the two asset reserves for farmers and businessmen be raised from its current level of $25,000 to $50,000. The remaining $40 million is designated for raising the asset reserve for non-farm and business assets from the current $12,500 to whatever level that sum would permit. |