Professional Judgment (“PJ”) Inside the Financial Aid Office
Professional Judgment and qualifying factors for special circumstances form the basis of the financial aid appeal process.
Financial Aid Appeal Professional Judgment provides the Financial Aid Administrator (“FAA”) discretion on a case-by-case basis to modify FAFSA reported parent/student financial data when there are “special circumstances”.
The financial data calculates the family Expected Family Contribution (“EFC) by subtracting the Cost of Attendance to establish family demonstrated financial need.
When you file a financial aid appeal, the FAA using PJ can can lower your EFC increasing your family financial need resulting in an increase in your financial aid package award.
The financial aid forms (FAFSA and CSS PROFILE) are imperfect and cannot accurately predict most families ability to pay for college. Special circumstances are the biggest reason, the solution is to file a financial aid appeal.
There are strategies to file an appeal without special circumstances.
The FAA is also permitted to change the Cost of Attendance.
Regardless of the family situation, the FAA must adhere to certain published “legislative intent” guidelines in exercising PJ.
Understanding PJ legislative intent is why professional assistance can be of great value.
Professional Judgment Also Extends to the Following Financial Aid Actions
- Resolve conflicting information,
- Classify a student as a homeless youth,
- Perform dependency overrides (Health Education Act Section 480(d)7),
- Report cases of fraud.
Examples of financial aid appeal letters demonstrate different special circumstances that might be relevant to a successful appeal.
Where does the Financial Aid Administrator receive Authorization and Guidance to perform Professional Judgment?
Section 479A of Higher Education Act Amendments of 1992 provides the basis for PJ providing the FAA receives adequate documentation. In such situations, the FAA can make adjustments on a case-by-case basis in two specifric areas only as specifically defined by legislation;
- the values of the data items required to calculate the expected student or parent contribution,
- the cost of attendance.
When can the Financial Aid Administrator use Professional Judgment?
The statute generally states that nothing within it shall be construed as limiting the authority of aid administrators to make data adjustments for some situations.
The law provides some examples of special circumstances as guidance but does not limit the FAA to the situations referenced nor does it require the FAA to grant PJ for the circumstances referenced.
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Why would the Financial Aid Administrator not perform Professional Judgment?
The FAA is not permitted to modify either the formula or the tables used in the EFC calculation. As referenced above, the FAA can only change the cost of attendance or the specific data elements used in the EFC calculation.
General student eligibility requirements do not fall within the realm of PJ. The FAA cannot circumvent the intent of the regulations. For example, the PJ cannot be used to change the Federal Supplemental Educational Opportunity Grant (FSEOG) selection criteria. It cannot add post enrollment activity expenses of the student to the Cost of Attendance.
[Strategy Alert:] The indicated changes possible above reference the Federal Financial Aid FAFSA. Schools are more subjective without federal regulation when disbursing institutional monie.
How does an Adjustment to the EFC Number Impact the Financial Aid Award Package?
When PJ adjusts downward the data element/s then revises EFC number which must be applied consistently for all Federal Student Aid funds awarded to that student.
What Happens If My School FAA Changes Data Elements and I Transfer?
Any PJ adjustment made by a school is specific to that school.
Why Would FFA not Exercise Professional Judgment?
There are some specific situations where the regulations specifically indicate that PJ should be exercised. The litmus test pertains to PJ legislative intent. In such cases where decisions are made contrary to regulatory intent the judgments are deemed “unreasonable”.
Using PJ in the cases below would not be appropriate and considered unreasonable;
- Tithing expenses, Vacation costs, high utility costs, high credit card payments – “living expenses”,
- Awarding Stafford Loan to a student enrolled less than half-time,
- Changing independent student to dependent student.
Generally if the expenses are controllable by family members when created then they are more likely to fall within the unreasonable category.
What are Examples Where FAA would use Professional Judgment?
It is important to remember although these events fall within the scope of PJ there is no guarantee that the individual FFA will exercise PJ.
Roth conversions increase adjusted gross income and taxes paid even though there is no cash received. The FAA can utilize PJ to reduce income and taxes paid to the amount that would have been reported if there was not Roth conversion.
[Strategy Alert:] It is important to note that as with specific special circumstances listed in the law, the FAA is not required to make an adjustment in this or any other situation.
Illness in the family can result in a modification of the Adjusted Gross Income EFC data element (what does your efc number mean?) to reflect lower earnings in the coming year. There also might be an adjustment to assets to indicate the family savings will be spent on medical expenses.
Here are a few others;
- Recent unemployment of family member/s,
- Medical, dental, or nursing care expenses not covered by health insurance,
- Changes in the family’s income and/or assets,
- Unusual one-time income event that inflates adjusted gross income
[Strategy Alert]: Organization of the letter with clearly marked exhibits to support your unusual situation is paramount to a favorable decision].Can I Appeal a Negative Decision to the Department of Education?
Ordinarily you only get one chance! We can help.
The return on your investment (“our fee”) can be very large!
Jim can be contacted by phone 817-600-0576.
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