Professional Judgment: Make the Right Call Erin Porter Texas A&M University

1. Professional Judgment:Make the Right CallErin PorterTexas A&M University

2. What is Professional Judgment? • The authority to take discretionary action in certain areas of financial aid administration • Professional Judgment (PJ) is not regulated by the Department of Education, although guidance is provided

3. “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.” Higher Education Act of 1965, as amended Section 479A.

4. Types of PJ • Adjusting data elements (# in HH, AGI, etc.) • Adjusting Cost of Attendance categories • Dependency override • Reduction of or refusal to certify Stafford loan • Unsubsidized Stafford if parents refuse to file FAFSA

5. Exception to case-by-case • HEROES Act of 2003 • Active duty military • Members of National Guard performing qualifying duty • People residing or employed in declared disaster area • People suffering economic hardship as a result of a war, military operation, or national emergency • Choose method of determining financial need that is most beneficial to individual and family

6. Examples of PJ requests • Changes in the family’s reported income or assets • Loss of or change in employment • Cessation of child support • Sale of business due to foreclosure or bankruptcy • (see HEA Sec 479A (b)) • Medical, dental, or nursing home expenses not covered by insurance • Dependant care (or elder care) expenses • Changes in number in household or in college

7. Examples of PJ requests, cont’d • Change of dependency status • Cannot change independent to dependent with PJ • Divorce or separation • Death of parent or spouse

8. Before Making Adjustments… • Document! • Must be collected before making adjustment • FAA is held accountable based on documentation • Kept in student’s file according to retention regulations • Verify! • Ensure that FAFSA is correct before making changes • Resolve! • Conflicting information must be resolved before proceeding

9. Income Protection Allowance • Do the documented expenses exceed the Income Protection Allowance for that category? • IPA amount for parent and student can be found in the FAA comments section of the SAR • IPA is made up of the following percentages: • Food 30% • Housing 22% • Clothing/personal care 16% • Other family consumption 12% • Medical 11% • Travel 9%

10. Cost of Attendance elements • Per HEOA 2008, Sec 427 – Cost of Attendance • Tuition and fees • Books • Supplies • Transportation • Room and Board • Loan fees • Miscellaneous personal living expenses • Dependent Care • Study Abroad for credit can replace standard COA • Costs associate with student’s disability • Cooperative education employment related expenses

11. Cost of Attendance adjustments • Additional tuition and/or fees not charged to entire student population • Increased books, supplies, housing, or transportation expenses • Higher than average dependent care (elder care) expenses

12. Cost of Attendance adjustments • Unexpected medical/dental expenses for student not covered by insurance • Adjustments to the COA must be reasonable and based on adequate documentation • Costs must have occurred during the academic period being adjusted

13. Proof of out-of-pocket expenses Documentation of additional costs related to a program of study Tax documents, W-2s, pay stubs Proof of termination of employment Proof of termination of untaxed income Divorce decree, letter of separation, proof of separate households Death certificates Letters from unbiased sources: clergy, counselors, etc. Document, Document, Document!

14. Definition of independent • HEOA Section 480(d) • See attachment • FAA may make a determination of independence based upon a documented determination of independence that was previously made by another FAA in the same award year.

15. Dependency Override • Cannot be done for • Parents refusal or inability to contribute to the student's education; • Parents refusal to provide information on the FAFSA or documents for verification • Parents not claiming the student as a dependent for income tax purposes; • Student demonstrating total self-sufficiency alone

16. Dependency Override • Examples that may warrant override • Abusive situation • Abandonment • Incarceration of parent(s)

17. Reduction or refusal of Stafford • Case-by-case • Must provide reason in written form to student • Cannot discriminate on the basis of race, national origin, religion, sex, marital status, age, or disability status

18. Unsub for parent refusal • Can be offered after verifying that parent(s) • have ended financial support of student • refuse to fill out the FAFSA • How do you document this? • Good question!

19. Making an otherwise ineligible student eligible Waiving citizenship requirement Ignoring default status Using PJ to circumvent law or regulation Exceeding annual loan limits Awarding Pell to Graduate student Adjusting the baseline EFC or COA as opposed to individual elements. Unauthorized uses of PJ

20. Policies and Procedures Manuals • What types of circumstances are typically considered for professional judgment and which are not? • What types of documentation are considered adequate for making PJ determinations? • What is the standard time for review, and how will notification be sent to the student or family? • Is there any way for the decision to be appealed?

21. Tips • Institutional forms keep the process uniform • Consult with other FAAs • Understand the Federal Methodology • Hand calculate an EFC! • Be consistent • Document! Document! Document!

22. Remember…. • We exist to remove financial barriers to higher education for students with need • Professional judgment is a tool you have to achieve this • Make sure your students know about this option

23. Thank you very much! Questions?