Professional Judgment in Financial Aid

Presented by – Samantha Veeder Director of Financial Aid Hobart & William Smith Colleges Guidance Counselor Workshop Syracuse, NY 11/15/01

PJ Definition

• Higher Education Act provides authority for financial aid administrator to exercise discretion in a number of areas.

• Allows the financial aid administrator to treat a student individually when the student has special circumstances that are not sufficiently addressed by the standard approach.

• Special circumstances are conditions that differentiate an individual student from a class of students rather than conditions that exist across a class of students.

• Often used in cases of either dependency overrides or income/data element adjustments.

PJ Principles

Professional Judgement Need and action require adequate documentation Must be administered on a case-by case basis Similar problems & resolutions still require case by-case review Across the board changes NOT permitted Institution may establish P&P to trigger review Extends authority to request supplemental information FA Administrator must make own decision on adjustments P&P provide framework must maintain individual review One institution may not accept another's adjustments May arrive at same conclusion - must document own decision

Areas to Perform PJ Adjustments

• Need analysis • Cost of attendance – Dependent care – Computer purchase • Satisfactory Academic Progress • Refusal or adjustment of loan certification

Areas Where PJ Does NOT Apply

Currently, FAA may not: • Change a student’s status from independent to dependent • Create a new cost category • Adjust EFC directly • Change the formula itself

CIRCUMSTANCE DATA VERIFICATION POSSIBLE ADJUSTMENTS Unusual medical and dental expenses Income reduction or non-recurring income (divorce, death, loss of employment) Unusual debts (mortgages, credit card to cover unemployment) Elementary/second ary school costs; dependent care Federal income tax sched. A – itemized deductions, and/or receipts Signed statements documenting estimated earnings, divorce agreements, disability/SS benefits Contract, mortgage, lien, billing payment summary Reduce AGI by expenses exceeding certain % of income.

Use projected year income for income reduction. For non recurring income, reduce AGI by that amount.

Reduce AGI by annual installment, or adjust assets Receipts for payment, signed statements Reduce AGI by expense amount, increase COA

Dependency Override

“In unusual circumstances, a student who does not meet any of the dependency criteria may still be considered to be independent on the basis of the financial aid administrator’s professional judgment.” SOURCE: SFA Handbook

Independent Criteria

Federal guidelines established in Higher Education Amendments of 1992. FAFSA questions 52-58.

• 24 years old by 12/31 of the award year, • Veteran of the U.S. Armed Forces, • Graduate or professional student, • Married, • Orphan or ward of the court, • Has legal dependents other than a spouse.