1. Professional Judgement
Catherine M. Boscher-Murphy
The discussion today will focus on addressing PJ for Federal and Institutional purposes. While some areas may be treated in a similar fashion for the state grant program, it is important to remember that there may be different timelines and/or requirements for a specific case. It is best to call HESAA staff directly to obtain the appropriate guidance.

2. Goals of this Session Define professional judgment
Review current statute and areas where professional judgment can be exercised
Discuss importance of documentation
Professional judgment is the authority provided under the Higher Education Act for the financial aid administrator to exercise discretion in a number of specific areas of student aid administration
not regulated by the Department of Education

3. 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 not regulated by the Department of Education
It is important to remember that PJ is not a new concept!!!
PJ Principles -
-special circumstances differentiate an individual student from a class of students
-need for special treatment and action taken must be adequately documented in the file
-policies and procedures provide basic guidelines and can identify circumstances that can trigger review by the FAA
-must be administered on a case-by-case basis
-across the board changes are not permitted
-although several individual students may have similar problems that may be resolved in a similar way, you must do each on a case-by-case basis
-FAA authority extends to requesting and using supplementary information
-FAA must make own decision about these discretionary adjustments - you may not automatically accept adjustments made by another institution

4. Why is PJ Important?
Enables FAA to respond appropriately to student’s individual circumstances that were not anticipated in legislation or regulation
something unique
merits individual attention
Key is to examine a student’s situation both objectively and subjectively to render a fair judgment - make our best effort to meet the needs of the student
-can impact retention and revenue
Remember - there are no right or wrong answers!
This can be very frustrating but the process is designed to get you to ask questions and analyze different situation -maybe even to look at a new situation as a potential for PJ

5. How is PJ triggered? FAA review of student file
Student request based on an unusual circumstance
FAFSA instructions
College colleague (VP or Dean) may request assistance with a case
Consider how you proactively seek out potential PJ files:
discussions with other offices
send a form when you see unemployment on a tax transcript

6. Using Professional Judgment
Why are financial aid administrators (FAAs) sometimes reluctant to use professional judgment?
Inexperience
Lack of confidence
Time and staffing constraints - it takes time to do a PJ well
Fear of audits and program reviews
Lack of confidence in making PJ’s due to the lack of regulation - it is up to the FAA to decide how and what to pursue - leaves us feeling vulnerable and uncomfortable
offices often do not have the time to consider unusual circumstances
do you standardize some of this? Are you proactive?
This session will provide you with a framework to consider difference situations in a way that is both meaningful and in compliance

7. Areas of Professional Judgment
Under HEA Section 479A of the Title IV programs:
allows aid administrators to exercise discretion on a case-by- case basis in specific areas:
Need analysis:
calculation of expected family contribution (EFC)
cost of attendance (COA)
Denial or reduction of eligibility for FFEL or Direct Loan Program loans
Dependency status
Satisfactory academic progress
Although not mentioned in HEA 479A, budget revisions are also considered a PJ

8. Examples of Unusual Circumstances
Loss of employment of family member
Unusual family medical or dental expenses not covered by insurance
Tuition expenses at elementary or secondary school for student’s siblings or dependents
Extraordinary dependent care expenses
Separation/Divorce of parent or independent student
Disability or Death of parent or independent student’s spouse
Private school tuition - many schools do not consider this as a basis for PJ but rather a life choice on the part of the family
consider the location of the family - Camden…
extraordinary expenses - handicapped sibling or elderly parent

9. Areas where PJ does not apply
Professional judgment may not be used to:
Change a student’s status from independent to dependent
Devise a new category of costs
Adjust the bottom-line EFC
Change the EFC formula itself

10. Make an otherwise ineligible student eligible for Title IV aid
Circumvent the intent of the law or regulations
Include post-enrollment expenses in COA (except where allowed in regulation)
Circumvent FSEOG selection criteria
Post enrollment costs
the Department has indicated that only those costs directly related to completing the student’s course of study may be included in the COA except for licensure costs (e.g. Nursing test) - this was added under HERA
licensing fees are typical cost that students mention

11. Adjustments to Data Elements
Adjustments may be made to data elements within need analysis formulas
No direct “bottom-line” EFC changes
Changes to FM formula not permitted
For Federal Pell Grant Program, adjustments must be submitted to CPS for recalculation of EFC
For non-Pell recipients, EFC may be recalculated by hand or by submitting adjustments to CPS

12. Cost of Attendance
Cost of attendance (COA) components may be adjusted to reflect individual unusual circumstances
Adjustments to COA must be made under categories defined by statute
Financial aid administrator may not create a new cost category through professional judgment
Computer costs - required or recommended
additional charges for excess credits

13. Adjustments to COA components can either increase or decrease the student’s standard budget
Costs must be those incurred by the student for the student, for the period of enrollment
change the room and board component of COA
decrease for independent living at home
increase for dependent living in apt
or establish budgets which reflect student living with parent/relative and student living on own

14. Loss of Income Loss of employment
resignation, laid-off, fired, retirement, death
separation/divorce
Loss of benefits or support
Social Security, disability, Social Services, unemployment, alimony, child support, etc.
Do you allow for the student who quits his job to attend school FT?
Can use base year for some items and projected year for others - for example - only projecting the SSA benefit

15. Income Protection Allowance
Food %
Housing 22%
Transportation 9%
Clothing/Personal Care 16%
Medical Care 11%
Other family consumption 12%
The formula already allows for income protection for modest living expenses
you should consider whether the expense you are looking at is already included in the IPA
Can also use PJ to increase data elements

16. Denial or Reduction of Loan
Section 479A of the HEA grants ability to financial aid administrators to either deny or reduce amount of student’s and/or parent’s eligibility for FFEL or Direct Loans

17. School may refuse to certify or may reduce the borrower’s loan eligibility if:
Determination is made on a case-by-case basis
Reason is documented and provided to student or parent, if PLUS borrower, in writing; and
School does not discriminate based on borrower’s race, national origin, religion, sex, marital status, age, or disability status

18. No exceptional circumstances are specified in law
School must decide under what conditions it will refuse to certify a loan or reduce amount of loan eligibility:
Unwillingness to repay
High debt burden
If parent is unable to borrow PLUS, denial of additional unsubsidized loan for student requires professional judgment
Bankruptcy is not an acceptable reason to deny loan

19. Independent Student Status
Important points in statutory definition:
Financial aid administrator is designated as the person responsible for making professional judgment decision
Congress intended that such decisions be made in response to student’s unusual circumstances
Decision must be based on adequate documentation
Examine the student’s relationship with the parents
is it unreasonable to require the student to obtain the parent’s financial data and signatures or expect the family to contribute to the cost of education?
Once you make the decision to perform a dependency override, the independent status applies to all Title IV programs

20. Cases where a dependency override is not allowed
Parents refusing to contribute to the student’s education
Parents unwilling to provide information on the FAFSA or for verification
Parents not claiming student as a dependent for tax purposes
Student demonstrating total self-sufficiency
from DCL GEN May 2003
Legal emancipation also carries no weight here
however, this may be an indication that an estranged relationship exists - you may want to explore this further
Legal guardian - not allowed as parent but may speak to estrangement at home
- best practice is to collect additional documents to support the claim - not just the guardianship papers.
How to complete the FAFSA:
if student has not filed yet -
answer the dependency questions accurately
complete student sections only, one signature
FAA complete the School Use Only box
if student has filed-
perform the override via EDE or FAA Access

21. Satisfactory Academic Progress
Administrative capability regulations require that a school establish and apply SAP policy within certain general parameters
Student eligibility regulations require that a student be meeting SAP standards and achieve a specific academic standing by the end of the second year in order to receive Title IV funds
Student consumer information regulations require that the SAP policy be disseminated to students

22. Mitigating circumstances are at discretion of school
School’s policy must provide procedures for student to appeal any determination that he or she is not making progress
On basis of mitigating circumstances, school may waive or redefine progress standards
Mitigating circumstances are at discretion of school
School has the option to define ‘mitigating’ circumstances - death of parent, illness or injury to student
designate individual responsible for making these decisions
if outside FA office, there must be an efficient means of communication to keep FA Office informed of decisions as they are made
Committee?
If ineligible based on SAP and you grant a waiver to the SAP policy, student establishes eligibility for all Title IV programs
must document reason for waiver
can set certain conditions regarding grades and enrollment
conditions must be reasonable and appropriate

23. Feds vs. HESAA
Be aware that there are a limited set of conditions that can be PJ’d for HESAA
Feds provide much more latitude
This may create an apparent conflict in the file
Need to document with quick note or statement in your policy

24. Policies and Procedures
Good practice to have written policies and procedures
provide some measure of consistency
help identify students who may benefit
Develop forms to collect information
For example - send a PJ packet to any student who shows unemployment compensation on a student or parent 1040?
You may also have students that come to the office asking for assistance
Do you have written procedures available in student literature? Is there information in the college catalog or on the FA web-site?

25. Use caution when writing policies
anything written is subject to review by auditor
write what you mean and mean what you write
Use words like ‘may’ and ‘could’

26. Decision Making in PJ Questions to ask:
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?
What should special treatment be?
What documentation is needed to support these determinations?
Even if you conclude that a situation does not merit any kind of action, you are making a professional judgment decision. Must document and inform student of results.
Your decision should not be questioned in a audit or program review as long as your decision was:
based on an area where the law allows you to make PJ
reasonable
reached on an individual basis
documented in the student’s file
You may feel pressured to make a PJ decision by other members of the institution, parents or the student himself based on treatment at another school - must arrive at your own decision based on the situation and all documentation

27. Documentation Documentation serves the following purposes:
Provides information in addition to that reported on FAFSA and other application documents (e.g., third-party documentation, copies of receipts, or canceled checks)
Provides history of student’s circumstances for future reference
Statute is silent on what constituted acceptable documentation.
Clear and adequate documentation
provide a trail or map of your decision making process for anyone reviewing the file in the future
Do not have to haveanother person agree but they must be able to understand why you came to your conclusion
NASFAA PJ Guide...

28. Two Types of Documentation
One type encompasses materials collected to support the student’s request
Another type constitutes a clear record of school’s decision, how it was reached, and the actions taken
Suggested good practice is to use separate forms or areas on a form to collect data and then make a decision
develop standard types of documents to collect
letter from family
letter from job
unemployment stubs, etc
corroboration from third party sources
teacher
social worker
minister
Watch for conflict of interest from parties on campus -

29. Best Practices Documentation should include:
Date of decision or action taken
Specific circumstance and, if appropriate, actual request of student or parent describing the circumstance
Source of information—for example, third-party documentation letters, receipts, bills, tax forms

30. Best Practices What decision was made
Whether decision can be attributed to a specific school policy or procedure and, if so, its citation
Name or initials and title of person making the decision

31. Maintenance of Documentation
If office is not automated, maintain documentation in student’s file
In automated offices, computer comment screens may be used to summarize action taken, when it was taken, and by whom it was authorized
Keep third-party and other paper documentation in student’s file

32. Other tips Understand your students
what type of circumstances are unusual but not rare?
Living arrangements, private school tuition
Are the decisions following the intent of the regulation?

33. Things to remember:
Decisions must not discriminate against the student
Situation must be revisited each year to determine that the circumstances are still in effect
Performing PJ’s is optional, not mandatory
PJ decisions combine common sense and economics with ethics

34. For further review NASFAA Statement of Ethical Principles
NASFAA Guide to Addressing Special Circumstances ( )