Professional Judgment:
Make the Right Call
Erin Porter
Texas A&M University
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
“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.
Types of PJ
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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
Exception to case-by-case
• HEROES Act of 2003
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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
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
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
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
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:
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Food
Housing
Clothing/personal care
Other family consumption
Medical
Travel
30%
22%
16%
12%
11%
9%
Cost of Attendance elements
• Per HEOA 2008, Sec 427 – Cost of Attendance
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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
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
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
Document, Document, Document!
• 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.
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.
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
Dependency Override
• Examples that may warrant override
– Abusive situation
– Abandonment
– Incarceration of parent(s)
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
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!
Unauthorized uses of PJ
• 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.
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?
Tips
• Institutional forms keep the process uniform
• Consult with other FAAs
• Understand the Federal Methodology
– Hand calculate an EFC!
• Be consistent
• Document! Document! Document!
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
Thank you very much!
Questions?