Professional Judgment Julie Rice Mallette – North Carolina State University Rose Mary Stelma – East Carolina University November 2006

What is Professional Judgment? Professional judgment is the authority provided under the Higher Education Act for financial aid administrators to exercise discretion in specific areas of student aid administration Professional judgment is the authority provided under the Higher Education Act for financial aid administrators to exercise discretion in specific areas of student aid administration Professional judgment is not regulated by the Department of Education Professional judgment is not regulated by the Department of Education

What Authorizes Professional Judgment? Section 479A of the Higher Education Act states: “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. However, this authority shall not be construed to permit aid administrators to deviate from the contributions expected in the absence of special circumstances.” Section 479A of the Higher Education Act states: “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. However, this authority shall not be construed to permit aid administrators to deviate from the contributions expected in the absence of special circumstances.”

Professional Judgment... Authorizes case-by-case adjustments to: Authorizes case-by-case adjustments to: Cost of attendance Cost of attendance Values of Federal Methodology data items Values of Federal Methodology data items Authorizes FAA to deny or reduce eligibility for FFEL or Direct Loan Authorizes FAA to deny or reduce eligibility for FFEL or Direct Loan Other statutory provisions allow for PJ regarding: Other statutory provisions allow for PJ regarding: Dependency status Dependency status Satisfactory academic progress Satisfactory academic progress

Professional Judgment... Provides FAA with flexibility to deal with unique circumstances affecting individual students Provides FAA with flexibility to deal with unique circumstances affecting individual students Allows for personal intervention by FAA in cases that merit individual attention Allows for personal intervention by FAA in cases that merit individual attention Enables FAA to respond appropriately to student’s individual circumstances which can never be fully anticipated in legislation or regulation Enables FAA to respond appropriately to student’s individual circumstances which can never be fully anticipated in legislation or regulation

How do you identify potential PJ students? FAFSA tells student to report unusual circumstances FAFSA tells student to report unusual circumstances Student might come into the office and speak with an administrator Student might come into the office and speak with an administrator Special request form on your website Special request form on your website Other ways? Other ways?

Questions to ask Questions to ask: Questions to ask: Is student or student’s family experiencing unique circumstances? Is student or student’s family experiencing unique circumstances? Does student’s unusual situation warrant special treatment because it affects the student’s or family’s ability to contribute to the cost of attendance? Does student’s unusual situation warrant special treatment because it affects the student’s or family’s ability to contribute to the cost of attendance? What should special treatment be? What should special treatment be? What documentation is needed to support these determinations? What documentation is needed to support these determinations?

Areas you can make professional judgments about: Statute governing the Title IV programs allows aid administrators to exercise discretion in specific areas: Statute governing the Title IV programs allows aid administrators to exercise discretion in specific areas: Dependency status Dependency status Need analysis: calculation of Expected Family Contribution (EFC) and cost of attendance (COA) Need analysis: calculation of Expected Family Contribution (EFC) and cost of attendance (COA) Satisfactory academic progress Satisfactory academic progress Denial or reduction of eligibility for FFEL or Direct Loan Program loans Denial or reduction of eligibility for FFEL or Direct Loan Program loans

When you CANNOT make a professional judgment Professional judgment may not be used to: Professional judgment may not be used to: Change a student’s status from independent to dependent Change a student’s status from independent to dependent Devise a new category of costs Devise a new category of costs Adjust the bottom-line EFC Adjust the bottom-line EFC Change the EFC formula itself Change the EFC formula itself

When you CANNOT make a professional judgment Professional judgment may not be used to (cont’d): Professional judgment may not be used to (cont’d): Make an otherwise ineligible student eligible for Title IV aid Make an otherwise ineligible student eligible for Title IV aid Circumvent the intent of the law or regulations Circumvent the intent of the law or regulations Include post-enrollment expenses in COA Include post-enrollment expenses in COA Circumvent FSEOG selection criteria Circumvent FSEOG selection criteria

Possible Special Circumstances Loss of employment of family member Loss of employment of family member Unusual family medical or dental expenses not covered by insurance Unusual family medical or dental expenses not covered by insurance (Tuition expenses at elementary or secondary school for student’s siblings or dependents (Tuition expenses at elementary or secondary school for student’s siblings or dependents Extraordinary dependent care expenses Extraordinary dependent care expenses Divorce of parent or independent student Divorce of parent or independent student Death of parent or independent student’s spouse Death of parent or independent student’s spouse Financial losses related to a natural disaster Financial losses related to a natural disaster Other circumstances you consider? Other circumstances you consider?

NC State Procedures PJs for EFC Changes Student submits request for reconsideration form and verification documentation (if not already verified) Student submits request for reconsideration form and verification documentation (if not already verified) Assistant Director performs verification, and then uses projected year data to recalculate EFC (if warranted) Assistant Director performs verification, and then uses projected year data to recalculate EFC (if warranted) Assistant Director documents PJ decision in writing in file and via comment in financial aid system and gives file/paperwork to Director to approve Assistant Director documents PJ decision in writing in file and via comment in financial aid system and gives file/paperwork to Director to approve Director reviews PJ decision and if approved, initials and dates PJ decision, and enters date approved in financial aid system Director reviews PJ decision and if approved, initials and dates PJ decision, and enters date approved in financial aid system Director gives paperwork back to Assistant Director for decision to be communicated to student/parent and award/revised award to be made. Director gives paperwork back to Assistant Director for decision to be communicated to student/parent and award/revised award to be made.

NC State Procedures Changes to COA Student requests change to cost of attendance verbally or in writing to assistant director. Student requests change to cost of attendance verbally or in writing to assistant director. Student submits written documentation (child care letter from provider, receipts for additional books, Computer and/or PDA Purchase Request Form, etc.) Student submits written documentation (child care letter from provider, receipts for additional books, Computer and/or PDA Purchase Request Form, etc.) Assistant director or counselor updates cost of attendance following office policy. Assistant director or counselor updates cost of attendance following office policy. Assistant director adjusts aid as needed. Assistant director adjusts aid as needed. Director reviews sample of these types of professional judgments. Director reviews sample of these types of professional judgments.

ECU Procedures –Changes to data elements Student submits Request for Reconsideration form. Student submits Request for Reconsideration form. Senior Assistant Director reviews request and all documentation. Senior Assistant Director reviews request and all documentation. Senior Assistant Director submits changes to student’s ISIR. Senior Assistant Director submits changes to student’s ISIR. New transaction comes to ECU New transaction comes to ECU Associate Director “OK’s” the PJ and the resulting changes Associate Director “OK’s” the PJ and the resulting changes Assistant Director or Counselor adjusts aid offer based on new EFC. Assistant Director or Counselor adjusts aid offer based on new EFC.

ECU Procedures – Changes to Cost of Attendance Student requests change to cost of attendance by speaking with an assistant director or counselor. Student requests change to cost of attendance by speaking with an assistant director or counselor. Student submits written documentation (child care letter from provider, receipts for additional books, information about purchasing a computer, etc.) Student submits written documentation (child care letter from provider, receipts for additional books, information about purchasing a computer, etc.) Assistant director or counselor updates cost of attendance Assistant director or counselor updates cost of attendance Assistant director adjusts aid as needed. Assistant director adjusts aid as needed. Senior Assistant Director for Quality Assurance reviews sample of these types of professional judgments. Senior Assistant Director for Quality Assurance reviews sample of these types of professional judgments.

Document Your PJ Decisions It is critical that you document why you made a professional judgment – what was the basis of your decision. It is critical that you document why you made a professional judgment – what was the basis of your decision. An auditor cannot question your decision, but can question your documentation - is it thorough and credible? An auditor cannot question your decision, but can question your documentation - is it thorough and credible?

Both ECU and NCSU Document Decisions By: Copy of request forms Copy of request forms Copy of supporting income documents Copy of supporting income documents Copy of letters from student and others Copy of letters from student and others Screen print of original ISIR data and changes we made as a result of the PJ Screen print of original ISIR data and changes we made as a result of the PJ Explanation for changes and calculations Explanation for changes and calculations FAA signature and date FAA signature and date