1. Professional Judgment in Student Financial Aid

2. What We’ll Talk About o What is “professional judgment?” o Where can you exercise your professional judgment? o Where can you not exercise your professional judgment? o A few case studies

3. What is Professional Judgment? o The authority provided under the Higher Education Act for financial aid administrators to exercise discretion in student aid administration o Section 484C of HEA o The purpose is to allow the financial aid administrator the opportunity to evaluate a family’s true need by considering unusual or extenuating circumstances

4. HEA Section 479A 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 value 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. Special circumstances may include tuition expenses at an elementary or secondary school, medical, dental, or nursing home expenses not covered by insurance, unusually high child care or dependent care costs, recent unemployment of a family member or an independent student, a student or family member who is a dislocated worker (as defined in section 101 of the Workforce Investment Act of 1998), the number of parents enrolled at least half-time in a degree, certificate, or other program leading to recognized educational credential at an institution with a program participation agreement under section 487,

5. HEA Section 479A a change in housing status that results in an individual being homeless (as defined in section 103 of the McKinney-Vento Homeless Assistance Act), or other changes in a family’s income, a family’s assets, or a student’s status. Special circumstances shall be conditions that differentiate an individual student from a class of students rather than conditions that exist across a class of students. Adequate documentation for such adjustments shall substantiate such special circumstances of individual students. In addition, nothing in this title shall be interpreted as limiting the authority of the student financial aid administrator in such cases (1) to request and use supplementary information about the financial status or personal circumstances of eligible applicants in selecting recipients and determining the amount of awards under this title, or (2) to offer a dependent student financial assistance under section 428H or Federal Direct Unsubsidized Stafford Loan without requiring the parents of such student to file the financial aid form prescribed under section 483 if the student financial aid administrator verifies that the parent or parents of such student have ended financial support of such student and refuse to file such form. No student or parent shall be charged a fee for collecting, processing, or delivering such supplementary information.

6. PJ Policies &Procedures o What unusual circumstances may trigger a PJ? o How are requests made? o Do you have processes to identify potential PJ situations? o What documentation (about the situation) do you require? o How do you document the PJ decision? o Who can make a decision? o What changes are made – to need analysis data – to awards?

7. Where Can You Exercise Your Professional Judgment? o Dependency status o Some data elements used to calculate the EFC o Cost of Attendance o Satisfactory Academic Progress o Denial or reduction of eligibility for Direct Loans o Unsubsidized Stafford Loan eligibility for dependent students whose parents refuse to complete the FAFSA and borrow a PLUS

8. Where Can You NOT Exercise Your Professional Judgment? o Change a student from independent to dependent o Create a new category of costs o Adjust the bottom-line EFC o Change the need analysis formula o Make an otherwise ineligible student eligible for Title IV aid o Circumvent the intent of the law or regulations o Circumvent FSEOG selection criteria o Include post-enrollment expenses (other than the on-time cost of obtaining a first professional credential in program requiring professional licensure or certification)

9. Dependency Overrides o Unusual circumstances o Two situations identified by Department of Education o Abusive family environment o Abandonment by parents o These situations do NOT qualify as unusual circumstances o Parents refuse to contribute to student’s education o Parents unwilling to provide information for FAFSA or verification o Parents do not claim the student on federal income tax form o Student is self-sufficient

10. Dependency Overrides o General recommendation is to collect third-party written documentation about the situation o Be sure to document the decision made and the circumstances considered when making the decision o Must make this determination on an annual basis o May use the decision made at another institution during the same year (not prior year)

11. Change in Dependency due to Marriage o At your discretion, you may update a student’s dependency status due to a change in marital status o If deemed necessary to address an inequity or o To more accurately reflect the student’s ability to pay o Case-by-case basis and must be documented o Must update other relevant data – spouse’s income, taxes, etc. o You may have a policy of not considering such updates after a specific date.

12. Adjusting Data Elements o The purpose of the adjustment is to impact the EFC o Examples of data elements that may be adjusted o Adjusted Gross Income o Taxes Paid o Assets o Submit adjustments to CPS for recalculation of EFC if Federal Pell Grant is impacted o Must use the resulting EFC for all Federal Student Aid programs

13. Cost of Attendance Adjustments o Cost of attendance components may be adjusted to reflect unusual, individual circumstances o Must use the categories already defined by law o Tuition and fees o Room and board o Books and supplies o Transportation, Personal, and Miscellaneous expenses o Can either increase or decrease costs

14. Some Possible PJ Situations o Loss of income for parent(s), student, or spouse o Elementary or secondary education expenses o Unusually high dependent care expenses o Unusually high medical and/or dental expenses not covered by insurance o Elder care, including nursing home expenses, not covered by insurance

15. Satisfactory Academic Progress o HEA 484(c) says a school may waive requirement for undue hardship based on o Death of a relative of the student o Personal injury or illness of student o Special circumstances as determined by school o You can review a student’s appeal and redefine satisfactory academic progress for that student, based on her “mitigating circumstances” o You determine what is “mitigating” – on a case-by-case basis

16. Reducing or Denying a Loan o HEA 479 (c ) says a school can deny or reduce the amount of a student’s eligibility for a Direct Loan o Case-by-case basis o Provide decision in writing to the borrower (student or parent) o Keep documentation supporting the determination o Reasons may include o You believe the borrower is unwilling to repay the debt o High debt burden

17. Unsubsidized Direct Loan Flexibility o You can award Unsubsidized loan to a dependent student without parental data if o Parent certifies cessation of support for the student o Parent refuses to complete the FAFSA (Remember, the parent can then NOT turn around and borrow a PLUS) o No circumstances warrant a dependency override o Student files FAFSA without parental data to determine eligibility for Federal aid

18. “Technical” Issues to Remember o Submit data element changes to CPS o Select “EFC Adjustment Requested” in PJ field o Make sure you have the updated ISIR before awarding aid o Important that FSA can distinguish PJ adjustments from corrections

19. “Technical” Issues to Remember o If student is selected for verification, you must complete it before exercising PJ o You are NOT required to verify a student who is NOT selected for verification before exercising PJ

20. Case Study 1 o Abby lives with her grandmother, who completed the FAFSA as Abby’ parent. She had NOT legally adopted, Abby’s mother’s whereabouts are unknown and her father is deceased. o Does Abby have unusual circumstances? o What documentation would you collect? o Letters from student, grandmother and others (not in the family) – counselors, clergy, etc.? o Would you do a dependency override for Abby?

21. Case Study 2 o Keisha and her brother are in college. Her parents are married. Her father loses his job in May. Her mother does not work outside the home. Would you make an adjustment for the upcoming year? o Does Keisha have unusual circumstances? o What documentation might you collect? o Wage statement, letter from employer, other? o Information about unemployment benefits? o What adjustment would you make? o AGI?Earnings?Taxes Paid?

22. Case Study 3 o Tony is a design major. Your COA budget allows $800 per year in books and supplies for design majors. He spent an additional $500 in books and supplies. o Does Tony have unusual circumstances? o Would you change his cost of attendance? o What documentation would you collect? o Receipts? o Statements that these books and supplies are required?

23. Case Study 4 o Zelda’s parents support Zelda and her grandmother, Zola. They help pay Zola’s mortgage, utility bills ($500 per month) and her real estate taxes ($800 annually). The family provides documentation of the expenses. o Does Zelda have unusual circumstances? o If yes, what action would you take? o Increase taxes paid by the amount of support? o Other?

24. References o Federal Student Aid Handbook o Search “PJ” on IFAP.ED.GOV o Training Session (Podcast) from 2011 o ISIR Analysis Tool o P&P Template o IFAP iLibrary lists resources available o Your campus P&P manual

25. Rose Mary Stelma Vice President, CFI 919.835.2402 Rosemary.stelma@cfi.org

26. NCASFAA would like to thank our Professional Affiliates! NCASFAA Fall Conference – November 1-4, 2015 26