USA Funds University Professional Judgment - WFAA .Professional Judgment Professional judgment is

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  • USA Funds University

    Professional JudgmentWFAA ConferenceOct. 18, 2012

  • Special Note

    These materials are for the benefit of financial aid professionals and other campus administrators. They are intended to provide current facts and information and are not intended to be legal advice. These materialscontain information related to Federal Title IV student aid programs and have neither been reviewed nor approved by the U.S. Department of Education. You are encouraged to seek your own competent legal counsel in connection with the topics covered in these materials. USA Funds disclaims all responsibility forany claim arising from reliance on the information provided.

    Copyright 2012 United Student Aid Funds, Inc. All Rights Reserved.

    Questions regarding the content of this publication should be addressed to USA Funds University, P.O. Box 6028 Indianapolis, IN 46206-6028 or by calling (317) 806-0208.

  • Professional Judgment

    Professional judgment is the discretionary action availableto a financial aid administrator to address unusualcircumstances that affect a students ability to payeducational expenses. Financial aid administrators maymake adjustments on a case-by-case basis, and mustdocument justification in the students file.

    Unusual CircumstancesSection 479A of the Higher Education Act of 1965, asamended, outlines what may constitute unusualcircumstances. The law notes that these circumstancesmust be considered on a case-by-case basis and that thecondition being addressed has differentiated an individualstudent from a defined group of students, rather thanconditions that exist across a group.

    Nothing in this part shall be interpreted as limiting theauthority of the financial aid administrator, on the basisof adequate documentation, to make adjustments on anindividual basis to the cost of attendance or the values ofthe data items required to calculate the expected studentor parent contribution (or both) to allow for treatment ofan individual eligible applicant with specialcircumstances.

    The schools financial aid office is not required to seek outunusual circumstances. It is the responsibility of thestudent or parents to request that their circumstances beconsidered. According to the 2012-2013 Federal Student AidHandbook, aid administrators must make reasonabledecisions that support the intent of the provision (AVG-100). Schools are accountable for their PJ adjustments andfor documenting each decision. A financial aidadministrators decision is final and cannot be appealed tothe U.S. Department of Education.

    The financial aid office may receive subsequent requestsfor an adjustment made in a prior year. It is acceptable tomake the same adjustment for multiple award years, aslong as updated documentation is submitted by the familyto ensure that the professional judgment still isappropriate.

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    Trainers Tidbit

    The Higher Education Relief Opportunities for StudentsAct of 2003, known as the HEROES Act, providesfinancial aid relief for individuals adversely affected bymilitary operations, national emergencies or naturaldisasters. The HEROES Act allows the U.S. Departmentof Education to waive certain statutory and regulatoryprovisions. The requirement that PJ be applied on acase-by-case basis for affected students and theirfamilies is one such waiver. Financial aid administratorsalso are encouraged to choose the method ofdetermining financial need that is most beneficial to theaffected individuals and their families.

    Trainers Tidbit

    The 2012-2013 Free Application for Federal Student Aidinforms applicants, If you or your family has unusualcircumstances that might affect your financial situation(such as loss of employment), complete this form to theextent you can, then submit it as instructed and consultwith the financial aid office at the college you plan toattend.

  • Policies and Procedures If a school chooses to allow professional judgmentadjustments, the school should develop policies andprocedures to address conditions that will be consideredusing PJ. Students must be treated consistently whiletaking into account economic changes or unforeseenchanges in a familys financial situation.

    Policies and procedures should indicate who may utilizeprofessional judgment within the financial aid office. If anaid administrator determines that the students situationwarrants a PJ adjustment, the reasons for the adjustmentmust be documented so that the change could beexplained during an audit or program review. In addition,having a well-documented student file provides anyoneworking with the file in the future with an understandingof how PJ was applied to the students situation. The nameof the aid administrator and the date the adjustment wasmade also should be documented.

    Some schools choose to create forms which students mustcomplete to request PJ. Forms should be clear andconcisely explain the information required, including whatinformation should be provided to sufficiently documentthe request. Information should be provided to the studentor family regarding how and when they will be notified ofthe outcome of the PJ request, along with information onany appeal process available.

    It is considered a best practice to notify students whorequest a PJ adjustment of an anticipated timeframe inwhich they may expect a response to their request. Thistimeframe should be included in the institutions policiesand procedures.

    The Final Rule, published Oct. 29, 2010, requires schools tofollow long-standing ED guidance to perform verificationon selected applicants before completing professionaljudgment requests for those students. This provisionbecame effective July 1, 2012, for the 2012-2013 awardyear and applies whether the student is selected forverification by ED or by the school's own policies andprocedures. The requirement does not apply to studentsrequesting a dependency override.

    Professional JudgmentCategories Most PJ decisions will fall within these four categories ofunusual circumstances:

    1. Cost of Attendance.

    2. Expected Family Contribution.

    3. Dependency status.

    4. Loan origination and eligibility.

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    Trainers Tidbit

    2012-2013 Federal Student Aid Handbook, AVG, Ch. 5.

    Before a financial aid administrator can exercise PJ, allconflicting information must be resolved.

  • Cost of Attendance A financial aid administrator may adjust a students Cost of Attendance for allowable expenses which exceed thestandard COA established by the institution.

    The table below illustrates the components that may be adjusted and examples of acceptable documentation tosubstantiate the adjustment.

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    Adjustments to Cost of Attendance

    Component Documentation Examples

    Tuition or fees not charged to the studentpopulation as a whole.

    u Charges on students account.

    Books and supplies expenses.

    u Charges on students account.u Proof of out-of-pocket expenses.u Statement from instructor(s) requiring additional books or supplies.

    Living expenses.

    u Charges on students account.u Proof of out-of-pocket expenses.u Estimated expenses.

    Student loan fees.u Documentation of actual fees charged.u Estimated fees charged.

    Transportation expenses.u Proof of out-of-pocket expenses.u Estimated expenses.

    Dependent care expenses.

    u Proof of out-of-pocket expenses.u Estimated expenses.u Statement from provider.

    Study abroad expenses.u Proof of out-of-pocket expenses.u Estimated educational, travel and living expenses.

    Computer purchase expenses.u Proof of out-of-pocket expenses.u Estimated expenses.

    Student disability-related expenses.

    u Proof of out-of-pocket expenses.u Estimated expenses.u Statement from disability office on campus.

    Cooperative education employment expenses.u Proof of out-of-pocket expenses.u Estimated expenses.

    First professional credential expenses.Note: May be added to COA once per eligibleacademic program.

    u Proof of exam fees or costs to obtain license or certification, incurredwhile enrolled.

    u Statement from educational program director.

  • COA Case Studies Kyle

    Kyle is a third-year, independent undergraduate student at your school. Kyle lives in an off-campus apartment andrecently incurred $1,200 in expenses to make repairs to his 10-year old car, which he uses to drive to class each day. Hepaid for the repairs using a credit card, but is unsure how he will pay the bill, since he uses virtually all of the money froma part-time job to help pay his monthly living expenses.

    Kyles COA is $12,500 and he receives a partial academic scholarship in the amount of $6,500. He is not eligible for aFederal Pell Grant, and the remaining $6,000 is covered through a combination of a $2,000 Federal Perkins loan and a$4,000 Federal Stafford loan. He comes to the financial aid office to see if you may be able to help him with his pendingcredit card bill for the necessary car repairs, and provides a copy of the bill for the repairs from the mechanic.

    Is this a potential professional judgment?

    If so, would you require additional documentation? What would you require?

    What kind of adjustment can be made?

    Does Kyle have remaining eligibility for federal aid to help cover the expense?

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    NOTES

  • Marilee

    Marilee is a first-year, independent undergraduate student at your school. Marilees COA is $9,500, which includes anallowance of $750 per semester for dependent care. The allowance for dependent care is assigned to students who filethe FAFSA as:

    u Married, with more than two people in the household; or

    u Single, and have more than one person in the household.

    The student also must confirm that the household size includ