Lisa Hoskins - UMKC

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Professional Judgment Case Studies

• Lisa Hoskins - UMKC
• Daniel Holt William Jewell College

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Cases for discussion

• What the law says vs. What you should know

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What the law says

• Higher Education Act of 1965, As Amended

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Section 479A Discretion of Student Financial Aid
Administrators

• (a) General 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. However, this authority shall not
  be construed to permit aid administrators to
  deviate from the contributions expected in the
  absence of special circumstances.

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Section 479A (cont.) Special Circumstances
include

• Tuition expenses at an elementary or secondary
  school,
• Medical or dental expenses not covered by
  insurance,
• Unusually high child care costs,
• Number of parents enrolled at least half-time in
  a degree, certificate, or other program leading
  to a recognized educational credential at an
  institution with a program participation
  agreement under section 487,

• Recent unemployment of a family member or an
  independent student,
• A family member who is a dislocated worker (as
  defined in section 101 of the Workforce
  Investment Act of 1998),
• A change in housing status that results in an
  individual being homeless (as defined in section
  103 of the McKinney-Vento Homeless Assistance
  Act),
• Other changes in a familys income, a familys
  assets, or a students status.

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Section 479A (cont.)

• The underlined text (previous slide) of Section
  479A was added by the College Cost Reduction and
  Access Act (CCRAA). Although the need analysis
  amendments made by the CCRAA have an effective
  date of July 1, 2009, the examples in Section
  479A should be viewed as guidance about
  appropriate situations in which a FAA could
  exercise professional judgment. The statute does
  not prohibit FAA from exercising professional
  judgment before July 1, 2009, in situations
  described by the additional language.
• FAAs must make all PJ decisions on a case-by-case
  basis and with appropriate documentation of the
  existence of an extenuating circumstance.

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Special Circumstances

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

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Section 479A Discretion of Student Financial Aid
Administrators

• (b) Adjustments to Assets Taken into Account A
  student financial aid administrator shall be
  considered to be making a necessary adjustment in
  accordance with subsection (a) if
• the administrator makes adjustments excluding
  from family income any proceeds of a sale of farm
  or business assets of a family if such sale
  results from a voluntary or involuntary
  foreclosure, forfeiture, or bankruptcy or an
  involuntary liquidation or
• the administrator makes adjustments in the award
  level of a student with a disability so as to
  take into consideration the additional costs such
  student incurs as a result of such students
  disability.

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HEROES ActHigher Education Relief Opportunities
Act of 2003

• September 30, 2007
• Defines affected individuals as Title IV
  applicants and recipients who
• Are serving on active duty during a war or other
  military operation or national emergency
• Are performing qualifying National Guard duty
  during a war or other military operation or
  national emergency
• Reside or are employed in an area that is
  declared a disaster are by any federal, state, or
  local official in connection with a national
  emergency or
• Suffer direct economic hardship as a direct
  result of a war or other military operation or
  national emergency, as determined by the
  Secretary.

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What you should know

• Best Practices
• Create an office Policy and/or Procedure
• Each individual should maintain Consistency
• Document as much as possible

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Overrides and Professional Judgment

• The phrase professional judgment is commonly
  used for the discretion that FAAs apply to
  dependency overrides and to data adjustments in
  the application. It is important to note that the
  provisions for these two types of changes are in
  separate places in the HEA.
• The citation for dependency overrides is in Sec.
  480(d)(7) the citation for data adjustments is
  in Sec. 479A and is copied in to a margin note in
  the last chapter
• of this guide.
• - FSA Handbook AVG p. 25

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Student 1

• SITUATION
• Independent Student
• Married, with 2 children
• Reported AGI of 75,856
• EFC of 6,839
• COA of 29,841
• Student only earned 1,600 in 2007
• Student and spouse are divorcing
• Children are enrolled in private secondary school

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Student 1

• SOLUTION
• Reduction of AGI
• Required Docs 2007 1040 Students W-2 Divorce
  documentation personal letter
• ISIR correction
• Secondary School Tuition
• Required Docs Letter and/or receipt from
  secondary school including amount of tuition
  charged
• Increase of COA
• Outcome Approved

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Student 2

• SITUATION
• Dependent Student
• EFC of 1,606
• COA of 26,156
• Mother has had job instability
• Appeal Form indicated disputing amounts re
  mothers estimated 2008 AGI
• Original AGI 23,292
• Estimated AGI 17,144 (moms report) and 25,082
  (employers report)

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Student 2

• SOLUTION
• Reduction of Parents AGI
• Required Docs 2007 1040 Letter from mothers
  employer letter from mother estimated 2008 AGI
  figures
• ISIR correction
• Outcome Denied
• Since employers figures were greater than
  current AGI, did not adjust. However, student was
  given additional aid

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Student 3

• SITUATION
• Dependent Student
• EFC of 19,121
• COA of 26,156
• Troubled relationship with mother- multiple
  suicide attempts, identity theft, and gambling
  problem

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Student 3

• SOLUTION
• Dependency Override
• Requested official documentation
• Student couldnt access private medical documents
• Could not document gambling issue
• Could not document identity theft
• Student submitted his 2007 1040, a personal
  letter, and a letter from his aunt
• ISIR correction
• Outcome Approved after deliberation

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Student 4

• SITUATION
• Dependent student
• EFC of 11,606
• COA of 44,836
• Parents made one-time withdrawal from 401K,
  reported as income on 2007 1040
• Other children are enrolled in private secondary
  school
• Student purchased personal PC

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Student 4

• SOLUTION
• Reduction of AGI
• Required Docs 2007 1040 (amount is listed on
  line 16) personal letter
• ISIR correction
• Secondary School Tuition Personal PC
• Required Docs receipt for purchase and letter
  and/or receipt from secondary school
• Increase of COA
• Outcome Approved

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Student 5

• SITUATION
• Dependent Student
• Completed FAFSA using guardians income info
• EFC 5430
• COA of 26,156
• Student is estranged from birth parents, but had
  seen them once every few years

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Student 5

• SOLUTION
• Dependency Override
• Collected students income information, personal
  letter, letter from case worker, documentation of
  guardianship
• ISIR Correction
• Outcome Approved

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Student 6

• Dependent Student
• Completed FAFSA, but selected for verification
• Student is estranged from parents over a
  religious disagreement
• Disagreement is less than 1 year old

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Student 6

• SOLUTION
• Dependency Override
• Student turned in letter requesting override
• Outcome Denied
• Disagreement was less than 1 year old and there
  was no proof of other abuse
• Student chose to borrow a private loan

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Student 7

• Dependent student
• EFC 14,500
• Parents AGI 70,000
• 6,000 Unreimbursed medical expenses

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Student 7

• SOLUTION
• Income protection allowance (11 of income is
  protected)
• Approved
• However, only lowered EFC to 13,173
• Did become AMG eligible.

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Student 8

• Dependent Student
• EFC 99,999
• Claiming one-time capital gain exceeding
  500,000
• No assets reported
• No earned income from work in 07
• Estimating low income for 08 (less than 30,000)

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Student 8

• SOLUTION (or lack thereof)
• Used money to purchase new home (but no income to
  maintain home)
• Ongoing approval/denial
• Requested additional information including 08
  tax return (not yet filed)
• How are they supporting household of 3 with
  27,000 in income but a half a million dollar
  home.

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Questions or Scenarios?
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Resources References

• NASFAA Monographs
• Finaid.org online resources
• Federal Student Aid Handbook- Application
  Verification Guide
• Dept of Eds Counselor Handbook