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P JThe Power of Change
Thomas M. Ratliff, MBA
SWASFAA PresidentDirector of Student Financial Services
Southwestern Oklahoma State University
Material from N•A•S•F•A•A
and SWASFAAour Regional Association
The PJ Problem
I don’t have any authority
I don’t know what I would change even if I could
I’m not sure what effect changes have
Am I liable if the government doesn’t like my decision?
Statutory Authority
Section 479A of the Higher Education Act provides the authority for the financial aid administrator to exercise discretion known as “professional judgment”
Higher Education Amendments of 1986 broadened professional judgment authority
Areas of Professional Judgment
Dependency Status
Data Elements
Cost of Attendance
FFEL & Direct Loan Eligibility
Satisfactory Academic Progress
Cannot Use Professional Judgment to:
Change a student’s status from independent to dependent
Adjust the EFC directly
Alter the need analysis formula or change table values
Create a new category of costs
Override a Return to Title IV Aid calc.
Cannot Use Professional Judgment to:
Include expenses for post-enrollment activities, such as bar examinations or professional licensing fees, in the student’s cost of attendance
Circumvent the statutory FSEOG selection criteria
Professional Judgment Principles
Must be made on an individual case-by-case basis
Subjective - no answer is regulated as right or wrong
You need justification in your file
You must document your decision
Two Types of Documentation
Decision Justification
• Written request from the student
• Supporting letters
• Paid bills or receipts
• Court papers
• Other related items
Record of Actions
• Decision made and how it was reached
• Actions taken
• School policy
• Name and title of decision maker
Dependency Status: Independent Student Definition
At least 24 years of age by Dec. 31st
Graduate or professional student
Married
Has legal deps. other than a spouse
Orphan or ward of the court
Veteran of the U.S. Armed Forces
Considered independent by PJ
Ask Yourself...
Are there unique circumstances which make it unreasonable to expect the student’s parents to contribute to
educational costs?
Effect of Dependency Override(if student attends a $20,000/year school)
$0.00
$5,000.00
$10,000.00
$15,000.00
$20,000.00
Dependent Independent
Student's Aid
Student's PC
Student's SC
Factors to Consider
GEN-03-07
GEN-03-07
Lists categories of independence in “Background” section
Gives clear guidance on page 2 “Unusual circumstances” defined as
inappropriate to expect parental contribution
You are given “great latitude”
GEN-03-07
ED acknowledges our typically prudent practices and
They applaud us for being here today
GEN-03-07 (cont.)
Practice making dependency overrides on only truly exceptional circumstances
Two examples given:
• parent’s cannot be located
• victims of abuse Reminder it must be case-by-case
GEN-03-07 (cont.)
What does NOT qualify as unusual:
• Parents refuse to contribute
• Parents unwilling to provide data
• Parents not claiming student on taxes
• Student totally self-sufficient
GEN-03-07 (cont.)
Application and Verification Guide (AVG) again recognizes abusive family and parental abandonment as possible factors to consider
Determination must be made annually You must reaffirm decision that parental
contribution is still inappropriate to expect
GEN-03-07 (cont.)
Cannot transfer override between schools Third party written documentation is
generally required
• However, student statement can be accepted if it is all you have and you believe it is sufficient in this case
Factors to Consider
GEN-03-07 Nature of relationship
with parents Student self-support Student’s current
address and places of residence in recent years
Support received from others
Third-party testimony
Parent PLUS loan access
Guardianship
You CANNOT Substitute legal
guardian as parent on FAFSA
Override the dependency status to “dependent”
You CAN Consider
guardianship in dependency override decision
Adjust EFC or COA elements using guardian’s financial information
Data Element Changes:Special Circumstances
Elementary or secondary school tuition Medical or dental expenses not covered by
insurance Unusually high child care costs Recent unemployment of a family member Parent(s) enrolled in college Other changes in a family’s income, assets, or
a student’s status
Special Circumstances
Special circumstances are conditions that differentiate an individual student from a whole class of students
You may not assume the circumstance exists for any group of students even if the group displays similar attributes
It is a violation to generalize conditions or situations for a population of students and make across the board adjustments
Cost of Attendance:Some Potential Adjustments
Dependent Care Expenses
Disability-related Expenses
Cooperative Education Programs
Study Abroad
Loan Fees
Standard Restrictions on COA
If attending less than half time -• Tuition, Fees, Books, Supplies,
Transportation, & Dependent Care Correspondence Study and
Incarcerated Students -• Tuition, Fees, Required Books, &
Supplies
COA PJ Restrictions
Cannot add post-enrollment costs such as professional licensing examination fees
No new cost components
Expenses must be incurred by the student for the student for the period of enrollment
PJ for Tuition and Fees
School policy must state if school uses average or actual tuition and fee charges in budget construction
May use professional judgment to deviate from policy on case-by-case basis
PJ for Room and Board
May use professional judgment to increase or decrease the standard allowance on case-by-case basis
PJ for Books & Supplies
May use professional judgment to increase or decrease the standard allowance on case-by-case basis
PJ for Rental or Purchase of Computer
School decides if, when, and under what conditions it will include computer costs
Any deviation from policy constitutes professional judgment
PJ for Dependent Care Allowance
Adding your school’s standard dependent care allowance to the budgets of qualifying students is not professional judgment
Adjusting the standard dependent care allowance for an individual student is professional judgment
FFEL & Direct Loan Eligibility:Denial & Reduction Authority
The law gives financial aid administrators the authority, under professional judgment, to deny or reduce the amount of a student or parent’s eligibility for a FFEL or Direct Loan.
General Guidelines
The determination must be made on a case-by-case basis
The reason for the action must be documented and provided in written form to the student
The school must not discriminate on the basis of race, national origin, religion, sex, marital status, age or disability status
Possible PJ Situations
Borrower’s unwillingness (not inability) to repay the loan
High debt burden
Satisfactory Academic Progress: Compliance Requirements
Student Eligibility, 668.32(f) and 668.34: student must be making satisfactory progress in his or her course of study according to the school’s satisfactory progress policy, contains other procedural requirements and basis for PJ
Administrative Capability, 668.16(e): school must establish, publish, and apply reasonable standards for measuring whether a student is maintaining satisfactory progress
Student Consumer Information, 668.42(c): school must disclose progress standards and procedures to re-establish eligibility
Required Qualitative SAP Policy Components
Same as or stricter than federal policy Consists of grades, work projects
completed, or comparable factors that are measurable against a norm
If program is >2 academic years, student must have a GPA of “C” or better at the end of the second year, or have an academic standing meeting graduation requirements
Required Quantitative SAP Policy Components
Maximum time frame in which a student must complete the educational program
Must not exceed 150% of the published length of the educational program
Maximum time frame divided into increments
Increment may not exceed lesser of one academic year or 1/2 the published length of the program
Required Quantitative SAP Policy Components
Policy must include work schedule showing minimum that must be completed at the end of each increment in order to complete program within maximum time frame
At the end of each increment, academic progress is evaluated. At a minimum, this must occur at the end of each year.
Additional Required SAP Policy Components
Must include specific policies defining effect of noncredit remedial courses and ESL courses
Must include specific policies defining effect of course incompletes, withdrawals, and repetitions
Transfer Students, Second Degrees, and Major Changes
No specific policy requirements• Must decide how transfer credits will
be treated• Must decide how all three groups will
be treated regarding the maximum time frame
• It’s good practice that satisfactory progress policy clearly addresses how these students will be treated
SAP Appeals and Re-Establishing Eligibility
Policy must include procedures for a student to re-establish that they are making satisfactory progress or to appeal a suspension
Who will make appeal decisions?
• Committee vs. individuals
When and how often will appeals be considered?
SAP Probation
Period of time during which student is considered to be making satisfactory progress despite failure to meet one or more of policy’s standards
School’s option to include probation as part of policy
Some schools have an “automatic” probation, others use it on a case-by-case basis
PJ vs. Policy
PJ is only exercised when a decision is made that is contrary to policy or is not specifically addressed in policy
If the situation is addressed in policy and you act in accordance with the policy, that is NOT PJ
Why is this distinction important?
• Because PJ must be a case-by-case review and documentation is required
P JThe Power of Change
Be involved. Be a voice. Make a difference.
Thomas M. Ratliff, MBA
SWASFAA President
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