1. Professional Judgment: Should ‘ya, Could ‘ya, Would ‘ya? 2008 ILASFAA CONFERENCE APRIL 16-18, 2008 SPRINGFIELD, ILLINOIS

2. Objectives A brief summary of Professional Judgment Identify the importance of PJ and the balance between PJ and federal regulations PJ – not for the faint-hearted, hard-hearted, soft- hearted or uninformed FAA! Recognize importance of PJ P&Ps PJ and consumer info: how to avoid frivolous appeals Review of actual cases

3. Summary of Professional Judgment PJ is authority provided under the HEA for FAA’s to exercise discretion in specific areas PJ is not regulated by ED HEA Section 479A: Authorizes case by case adjustments to: – COA: increase OR decrease – Values of FM data items – Authority to deny or reduce loan certification – Other statutory provisions allow for PJ regarding: Dependency status Satisfactory academic progress (SAP)

4. The importance of regulatory compliance and exercising PJ Use PJ when a round peg doesn’t fit into a square hole – gives you flexibility FAAs can personally intervene in cases that need individual attention Ability to respond to individual circumstances not anticipated in legislation or regulation

5. PJ – not for the faint-hearted, hard- hearted, soft-hearted or uninformed! FAAs hesitate to exercise PJ because of: – Inexperience – Lack of confidence – Time and staffing constraints – Fear of audits and program reviews

6. No PJ allowed! PJ may not be used to: – Change independent student to dependent – Create a new category of costs – Adjust bottom-line EFC – Change EFC formula – Make across-the-board changes – Make an otherwise ineligible student eligible – Circumvent intent of law or regulations – Include post-enrollment expenses – Circumvent FSEOG selection criteria

7. No PJ allowed! (continued) Conditions that do NOT merit dependency override: – Parents refusal to pay for education – Parents unwilling to provide FAFSA information – Parents not claiming student for income tax purposes – Student demonstrating total self-sufficiency

8. PJ Policies and Procedures The need for policies and procedures is crucial Staff must be trained to evaluate PJ appeals consistently and fairly Staff must know verification regulations and FM Documentation, documentation, documentation!: – Documentation of special circumstance – Documentation of school’s decision, how it was reached, and action taken

9. PJ and consumer information – managing the number of appeals submitted to your office Need for PJ consumer info on your web site – Loss of income: does it exceed a pre-determined percentage? – Verification of current income prior to processing PJ appeal – SAP appeal policy – Dependency override policy – Increases to COA: limits for computer purchase, day care, travel, etc.

10. Discussion of actual cases COA Adjustment EFC Adjustment Deny or reduce loan certification Dependency override Satisfactory Academic Progress

11. NASFAA Monograph Professional Judgment in Eligibility Determination and Need Analysis October 2007, Number 21

12. COA COA: Student will begin student teaching and requests increase in COA for: – Professional wardrobe: 5 pairs of slacks, 8 dress shirts, shoes, socks, 2 sport coats, belt – Travel to school site – Cell phone to check on school delays, cancellations – School supplies for students – Luncheon expenses while at school site – Laptop for processing course plans

13. COA Increase Student requests COA increase for child care. Care provider charges $12/ hour for toddler and $15/hour for infant. Student is enrolled FT and calculates she will need child care 40 hours/week ($1080 per week) (15 week semester = $16,200).

14. EFC Adjustment Student divorced in 1/08 and filed joint return for 2007. Student continues to live with ex- spouse who fully supports student and their children. Total family income is $83,000, of which $3,900 is student’s earnings. Student requests PJ for divorce, 3 in family, and reduced income.

15. EFC Adjustment I am a parent and I want to tell you about a 1 year blip in my AGI because I sold a vacant piece of property and had $90,000+ in capital gains.. a. what would you do...(reduce AGI?) and would you do anything differently if the additional income was used to....pay off massive medical bills because of chemotherapy or...pay off credit card debt

16. EFC Adjustment We allow folks to project a 2008 income after 5/1/08 and use that instead of 2007 AGI. So let's say someone did that in 5/1/2007 (last year)....and we gave them more money last year. Now it's 2008 and they say they want to project again because this year isn't going to look like last year AND when we see what their actual 2007 income was versus what they projected they REALLY low balled it....so would you: a. go ahead and let them project again b. make them wait until 12/08 to project 2008 c. deny the special circumstance straight up d. something else???

17. Deny or reduce loan certification Co-worker/student tells another FAO staff member that she will borrow “up to the max”, but no way will she ever repay her student loans. Would you refuse to certify additional loans?

18. Deny or reduce loan certification Student has a history of withdrawing from school as soon as she receives her loan refund. She is currently on financial aid suspension. She has submitted an appeal to be removed from suspension and the appeal has been approved. Would/should/could you refuse to include federal loans in her award package?

19. Deny of reduce loan certification Student has appealed probation and suspension status during undergrad and grad programs numerous times based on disabilities. Numerous appeals have been approved. Student is working on 2 nd Master’s degree, is placed on financial aid suspension due to time frame and credits. A. would you continue to approve SAP appeals? B. refuse to certify any additional loans?

20. Deny of reduce loan certification Student says she has applied for a direct-to- consumer loan but refuses to say how much she is borrowing. What action, if any, would you take?

21. Dependency Override Student’s father refuses to complete FAFSA because he wants student to attend a madras in Saudi Arabia and become a fundamentalist follower of Islam. Student is requesting a dependency override because he doesn’t want to go to Saudi Arabia.

22. Dependency override Student files as “ward of the court” because she was living in a group home, but no longer does so. – If the student has no parental contact, would you make her independent? – If the student now has complete parental contact, would you make her dependent?

23. Dependency override Student has been convicted of DWI 3 times. Parents refuse to complete FAFSA because they “won’t continue to contribute to his lifestyle”. Student appeals to be independent and provides letter from parent documenting their position and requesting student be considered independent.

24. Satisfactory Academic Progress Student was accused of rape and failed to maintain SAP because of resulting stress, legal problems, etc. Student appealed financial aid suspension and provided documentation of dismissal of charge because of false accusation. A. Would you approve his appeal? B. Would you place him back on financial aid probationary status?

25. Satisfactory Academic Progress Student appeals financial aid suspension because she was arrested for DWI and was unable to attend classes for two weeks.

26. Packaging after PJ IF you accept a special circumstance do you then run the student back through regular packaging philosophy and let them be eligible for any and all kinds of money (as if the special circumstance EFC was the first one so to speak)?....

27. Contact Information Diane Lambart Fleming Associate Director-Client Services Office of Scholarships and Financial Aid Central Michigan University Student Service Court Mt. Pleasant, MI 48859 Phone: (989) 774-7429 Fax: (989) 774-3634 Email: flemi1dl@cmich.eduflemi1dl@cmich.edu