Bridgette Ingram and Mary Teel

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Bridgette Ingram and Mary Teel

• PROFESSIONAL JUDGMENT

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• Agenda
• Define professional judgment
• Scenarios
• TAMU Process Flow

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Professional Judgment is

• A mechanism for a financial aid administrator to
  exercise discretionary action for unusual
  circumstances that affect a students and/or
  parents ability to pay for educational expenses.

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• Financial aid professionals are all given
  authority by the Secretary of Education to
  exercise professional judgment.
• An aid administrator may use professional
  judgment on a case-by-case basis only to alter
  the data used to calculate the EFC.
• Act as if every professional judgment will be
  reviewed in an audit.

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• PJs can only occur with supplemental
  information.
• You must be able to distinguish between changes
  in a familys circumstances that are a function
  of choice, and those that are a function of
  necessity.
• Using this will help you distinguish expenses
  that you should or should not consider.

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• Remember you are given the authority !
• Every financial transaction has a receipt..
• Documentation is a MUST
• When in doubt use your life lines
• Poll the audience (your peers, your supervisor)
• Phone a friend (someone at another college)
• Eliminate options (tell the student what you can
  do)

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What to do?

• Take emotion out of the equation
• Ask for documentation (documentation will tell
  the story)
• What meets the measure of an exception? Is the
  circumstance individual, meaning it is not
  something that has happened to a class of
  students.
• Decision making, is it informed, repeatable,
  unemotional, not personal and documentable?
  (NASFAA presentation)

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What are some unusual circumstances ?

• Loss of employment
• Loss of benefits
• Medical expenses
• Separation or divorce
• Death (parent, spouse)
• Expecting the birth of a child or addition to the
  household
• Nursing home expenses, not covered by insurance.

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DocumentationWhat do I ask for?

• It is unlimited.
• You ask for what you believe will assist you in
  evaluating the particular review that you are
  doing.
• What items are best
• Third party letters
• Memos
• Tax documents
• Financial statements
• Receipts

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Did you know?

• Bottom Line Adjustments to an Estimated Family
  Contribution (EFC) is PROHIBITED!
• You should understand the Federal Methodology and
  how each data element is treated.

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Did you know?

• These circumstances do not warrant dependency
  overrides
• Parents refusal to contribute to educational
  costs.
• Parents unwilling to provide information on FAFSA
  or TASFAA or for verification of the file.
• Parents do not claim the student as a dependent.
• Student demonstrates total self-suffiency.

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NO PJ Allowed!

• Cannot use PJ to make a an otherwise ineligible
  student eligible for aid.
• Cannot use to circumvent law or regulations
• Under no circumstance can an FAA grant a Stafford
  loan for a student who is less than half time.
• May not grant PJ for post enrollment activities,
  professional licensing exams

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In todays economic times.

• Recent information - 2/3 of institutions saw a
  10 increase in request for PJs.
• The Dept. of Ed has encouraged making adjustments
  for those who need them.
• Could there be different scenarios from what we
  have seen in the past (beyond unemployment)?
• Salary cuts
• Hardship withdrawals from retirement to cover
  medical bills.

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Types

• Unsubsidized loan for dependent students when
  parent refuses to fill out the FAFSA
• Adjustment to FAFSA data for extenuating
  circumstances
• Dependency Override
• Cost of Attendance increase

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From the handbook (application and verification
guide chap 2)

• You must get documentation (1) that his parents
  refuse to provide information for his FAFSA and
  (2) that they do not and will not provide any
  financial support to him. Include the date
  support ended. If the parents refuse to sign and
  date a statement to this effect, you must get
  documentation from a third party (the student
  himself is not sufficient), such as a teacher,
  counselor, cleric, or court.

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• Scenarios

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Unsubsidized loan for dependent

• Kristen wanted to come to Texas AM University
  and her parents were adamantly against it. They
  wanted her to go to a local college. The parents
  wrote a letter stating they would not support her
  financially and would not fill out their
  information on the Free Application for Federal
  Student Aid (FAFSA). What would you do?

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Adjustment to FAFSA

• Kittys mother had income earned from work of
  25,000 in 2011 but is no longer employed for
  2012. After receiving documentation confirming
  this, What would you do?

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Adjustment to FAFSA

• In 2011 Alan had 2,850 in medical expenses that
  were out-of-pocket costs. He is married, has two
  children, and is the only member of his household
  in college, so his IPA is 33,300. What would you
  do?

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Adjustment to FAFSA

• John (the parent) converted his regular IRA into
  a Roth IRA by transferring funds. The amount
  converted has to be reported as taxable income on
  the tax return. So the income reported on the
  FAFSA will be higher than without the Roth
  conversion, even though the family doesnt
  actually have additional income or assets
  available. What would you do?

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Dependency Override

• Ryan has had no contact with his Mom since he was
  3 years old. He has lived with his Dad who is an
  alcoholic and verbally abusive. He lived with
  his Dad all but a few months at the end of high
  school and checks on him every now and then.
  Documentation has been received from his high
  school teacher.
• What would you do?

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Dependency Override

• Alyshia submitted documentation explaining that
  her parents would not support her through college
  because of the boy she was dating. What would you
  do?

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Dependency Overrides!

• What circumstances have you used?
• What documentation have you requested to do this?
• - What if a parent does not like a students
  boyfriend or girlfriend?
• - What if a parent does not want to release tax
  data?
• - What if the student has lived with neighbors or
  a teacher due to abuse at home?

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Cost of Attendance

• Henry is a graduate student who moved from
  Oklahoma. He is asking for an increase for moving
  expenses, U-haul rental, gas for U-haul, in
  addition to the deposits he had to pay for an
  apartment and electricity. He feels these cost
  fall under educational expenses to attend TAMU.
  What would you do?

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Cost of Attendance

• Freddie submitted a request that he needs to pay
  his rent (400 month), pay electricity (125
  month) and has short term loans to pay off. His
  parents bought him a car so he needs to pay the
  difference and have insurance. He eats out a lot
  because he is very busy. What would you do?

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Cost of Attendance

• Heather states that she broke her arm and has had
  to pay over 1000 in out of pocket medical
  expenses she had not planned for during this
  semester. She is now short funds to pay her
  November and December rent. What would you do?

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• TAMU Process Flow

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About Us

• Approximately 800 professional judgments
  processed to date for 2012-2013.
• Average processing time 5 to 7 business days.

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Professional Judgment Flow
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Banner Schools Tidbit

• Use RNINAIQ to determine components of federal
  methodology.

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Resources

• NASFAA website
• NASFAA Monograph 26
• HEA Sec 479A(a)
• Federal Student Aid Handbook
• Dear Colleague Letters GEN-09-04 and GEN 09-05
  and 2010-05-21, 2010-05-05

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Final Thoughts

• Advocate for students and parents
• Respect others professional judgment
• Dont forget to
• DOCUMENT