College Financial Aid for Families in Crisis Daniel T. Barkowitz Kids Chance of America Annual Conference May 4, 2019

“In My Junior Year of High School, My Father Died and the World Passed Away”

Agenda A Quick Review of the Process – What Forms Do I Need to File? What Income Information Do We Look At? When to Ask for a Professional Judgment How Colleges Handle “Outside” Scholarships

What Application Forms Does a Family File? FAFSA – Free Application for Federal Student Aid Free form - one per student Every college, every year fafsa.gov or MyStudentAid app CSS Financial Aid Profile Paid form Only for colleges who need it cssprofile.collegeboard.org/ Each School’s Financial Aid (or Scholarship) Application State Scholarship Application Forms (e.g. Florida Financial Aid Application - www.floridastudentfinancialaidsg.org)

Is the Student Dependent or Independent?

Does the FAFSA Require Parental Information?

When Do They File the Form? What Income Do They Use? Example given is for the 2019-20 School Year. Income used comes from Prior Prior Year (PPY) Income Earned from January to December 2017 Tax Return filed January – April 2018 FAFSA (and other forms) filed starting October 2018 School year starts August 2019 (bill due June 2019 / December 2019)

What Happens if Income Has Changed? Death of a Parent Before FAFSA is filed, PPY income reported is surviving parent only. If no surviving parent, student is independent. After FAFSA is filed, if no surviving parent, student is independent. Otherwise, Professional Judgment (PJ) Request Loss / Gain of Income Income is reported based on PPY year. If unusual income (settlement, etc.), PJ Request. If parent has lost employment in PY or CY, then PJ request.

What is Professional Judgment (or PJ)? Authorized by HEA Sec. 479A(a): “IN GENERAL—Nothing in this part shall be interpreted as limiting the authority of the financial aid administrator, on the basis of adequate documentation, to make adjustments on a case-by-case basis to the cost of attendance or the values of the data items required to calculate the expected student or parent contribution (or both) to allow for treatment of an individual eligible applicant with special circumstances.” PJ is not regulated by ED Is subject to audit, but FAAs are given wide latitude (within a framework) Dependent on Financial Aid Officer’s Individual Judgment

Some Examples of PJ From HEA 479A(a), the ability to: Modify Cost of Attendance items Modify values of data elements in the EFC formula Offer a dependent student Unsubsidized Direct Stafford without requiring parent data on the FAFSA From HEA 479A(b), the ability to: Exclude from family income the assets of sale of farm or business assets if such sale results from foreclosure, bankruptcy, or involuntary liquidation Consider the costs that a student incurs based upon his/her disability From HEA 480(d)(7): The ability to override the dependency status of an otherwise dependent student to allow her/him to be considered an independent student

The Basic Financial Aid Formula: COA – EFC = Need

Case Study: The Impact of an “Outside” Scholarship Three different students each receive an outside scholarship of $5,000. Their starting financial aid packages are below: $25,000 COA 10,000 EFC 15,000 Need Starting Aid Package $3,500 Direct Sub Loan 2,000 Unsub Loan 1,500 Work Study 3,000 College Grant 10,000 Total Aid $5,000 Unmet Need $25,000 COA 0 EFC 25,000 Need Starting Aid Package $6,000 Federal Pell Grant 3,500 Direct Sub Loan 2,000 Unsub Loan 1,500 SEOG 12,000 College Grant 25,000 Total Aid $ 0 Unmet Need $25,000 COA 45,000 EFC 0 Need Starting Aid Package $5,500 Direct Unsub Loan 12,000 College Scholarship 17,500 Total Aid $ 0 Unmet Need

What’s the policy? Does the college / university have a written or unwritten policy on how to treat “outside” scholarships? Does the college meet full need? Do they follow the “best” criteria for students? Unmet need Self-Help Work Loan Grants EFC The “special” case of Pell Grant / Bright Futures / Waivers

Resources for More Information Daniel T. Barkowitz dbarkowitz@valenciacollege.edu Moneyman’s Financial Aid Blog moneyman.home.blog The SmartStudent Guide to Financial Aid finaid.org Information for Financial Aid Professionals ifap.ed.gov Federal Student Aid Training fsatraining.ed.gov

Questions / Comments