1. P J The Power of Change Thomas M. Ratliff, MBA SWASFAA President Director of Student Financial Services Southwestern Oklahoma State University

2. Material from NASFAA and SWASFAA our Regional Association

3. The PJ Problem u I don’t have any authority u I don’t know what I would change even if I could u I’m not sure what effect changes have u Am I liable if the government doesn’t like my decision?

4. Statutory Authority u Section 479A of the Higher Education Act provides the authority for the financial aid administrator to exercise discretion known as “professional judgment” u Higher Education Amendments of 1986 broadened professional judgment authority

5. Areas of Professional Judgment u Dependency Status u Data Elements u Cost of Attendance u FFEL & Direct Loan Eligibility u Satisfactory Academic Progress

6. Cannot Use Professional Judgment to: u Change a student’s status from independent to dependent u Adjust the EFC directly u Alter the need analysis formula or change table values u Create a new category of costs u Override a Return to Title IV Aid calc.

7. Cannot Use Professional Judgment to: u Include expenses for post-enrollment activities, such as bar examinations or professional licensing fees, in the student’s cost of attendance u Circumvent the statutory FSEOG selection criteria

8. Professional Judgment Principles u Must be made on an individual case-by- case basis u Subjective - no answer is regulated as right or wrong u You need justification in your file u You must document your decision

9. Two Types of Documentation u Decision Justification Written request from the student Supporting letters Paid bills or receipts Court papers Other related items u Record of Actions Decision made and how it was reached Actions taken School policy Name and title of decision maker

10. Dependency Status: Independent Student Definition u At least 24 years of age by Dec. 31st u Graduate or professional student u Married u Has legal deps. other than a spouse u Orphan or ward of the court u Veteran of the U.S. Armed Forces u Considered independent by PJ

11. Ask Yourself... Are there unique circumstances which make it unreasonable to expect the student’s parents to contribute to educational costs?

12. Effect of Dependency Override (if student attends a $20,000/year school)

13. Factors to Consider u GEN-03-07

14. GEN-03-07 u Lists categories of independence in “Background” section u Gives clear guidance on page 2 u “Unusual circumstances” defined as inappropriate to expect parental contribution u You are given “great latitude”

15. GEN-03-07 u ED acknowledges our typically prudent practices and u They applaud us for being here today

16. GEN-03-07 (cont.) u Practice making dependency overrides on only truly exceptional circumstances u Two examples given: parent’s cannot be located victims of abuse u Reminder it must be case-by-case

17. GEN-03-07 (cont.) u 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

18. GEN-03-07 (cont.) u Application and Verification Guide (AVG) again recognizes abusive family and parental abandonment as possible factors to consider u Determination must be made annually u You must reaffirm decision that parental contribution is still inappropriate to expect

19. GEN-03-07 (cont.) u Cannot transfer override between schools u 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

20. Factors to Consider u GEN-03-07 u Nature of relationship with parents u Student self-support u Student’s current address and places of residence in recent years u Support received from others u Third-party testimony u Parent PLUS loan access

21. Guardianship You CANNOT u Substitute legal guardian as parent on FAFSA u Override the dependency status to “dependent” You CAN u Consider guardianship in dependency override decision u Adjust EFC or COA elements using guardian’s financial information

22. Data Element Changes: Special Circumstances u Elementary or secondary school tuition u Medical or dental expenses not covered by insurance u Unusually high child care costs u Recent unemployment of a family member u Parent(s) enrolled in college u Other changes in a family’s income, assets, or a student’s status

23. Special Circumstances u Special circumstances are conditions that differentiate an individual student from a whole class of students u You may not assume the circumstance exists for any group of students even if the group displays similar attributes u It is a violation to generalize conditions or situations for a population of students and make across the board adjustments

24. Cost of Attendance: Some Potential Adjustments u Dependent Care Expenses u Disability-related Expenses u Cooperative Education Programs u Study Abroad u Loan Fees

25. Standard Restrictions on COA u If attending less than half time - Tuition, Fees, Books, Supplies, Transportation, & Dependent Care u Correspondence Study and Incarcerated Students - Tuition, Fees, Required Books, & Supplies

26. COA PJ Restrictions u Cannot add post-enrollment costs such as professional licensing examination fees u No new cost components u Expenses must be incurred by the student for the student for the period of enrollment

27. PJ for Tuition and Fees u School policy must state if school uses average or actual tuition and fee charges in budget construction u May use professional judgment to deviate from policy on case-by- case basis

28. PJ for Room and Board u May use professional judgment to increase or decrease the standard allowance on case-by-case basis

29. PJ for Books & Supplies u May use professional judgment to increase or decrease the standard allowance on case-by-case basis

30. PJ for Rental or Purchase of Computer u School decides if, when, and under what conditions it will include computer costs u Any deviation from policy constitutes professional judgment

31. PJ for Dependent Care Allowance u Adding your school’s standard dependent care allowance to the budgets of qualifying students is not professional judgment u Adjusting the standard dependent care allowance for an individual student is professional judgment

32. FFEL & Direct Loan Eligibility: Denial & Reduction Authority u 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.

33. General Guidelines u The determination must be made on a case-by-case basis u The reason for the action must be documented and provided in written form to the student u The school must not discriminate on the basis of race, national origin, religion, sex, marital status, age or disability status

34. Possible PJ Situations u Borrower’s unwillingness (not inability) to repay the loan u High debt burden

35. Satisfactory Academic Progress: Compliance Requirements u 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 u Administrative Capability, 668.16(e): school must establish, publish, and apply reasonable standards for measuring whether a student is maintaining satisfactory progress u Student Consumer Information, 668.42(c): school must disclose progress standards and procedures to re-establish eligibility

36. Required Qualitative SAP Policy Components u Same as or stricter than federal policy u Consists of grades, work projects completed, or comparable factors that are measurable against a norm u 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

37. Required Quantitative SAP Policy Components u Maximum time frame in which a student must complete the educational program u Must not exceed 150% of the published length of the educational program u Maximum time frame divided into increments u Increment may not exceed lesser of one academic year or 1/2 the published length of the program

38. Required Quantitative SAP Policy Components u 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 u At the end of each increment, academic progress is evaluated. At a minimum, this must occur at the end of each year.

39. Additional Required SAP Policy Components u Must include specific policies defining effect of noncredit remedial courses and ESL courses u Must include specific policies defining effect of course incompletes, withdrawals, and repetitions

40. Transfer Students, Second Degrees, and Major Changes u 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

41. SAP Appeals and Re-Establishing Eligibility u Policy must include procedures for a student to re-establish that they are making satisfactory progress or to appeal a suspension u Who will make appeal decisions? Committee vs. individuals u When and how often will appeals be considered?

42. SAP Probation u Period of time during which student is considered to be making satisfactory progress despite failure to meet one or more of policy’s standards u School’s option to include probation as part of policy u Some schools have an “automatic” probation, others use it on a case-by- case basis

43. PJ vs. Policy u PJ is only exercised when a decision is made that is contrary to policy or is not specifically addressed in policy u If the situation is addressed in policy and you act in accordance with the policy, that is NOT PJ u Why is this distinction important? Because PJ must be a case-by-case review and documentation is required

44. P J The Power of Change Be involved. Be a voice. Make a difference. Thomas M. Ratliff, MBA SWASFAA President