1. Satisfactory Academic Progress & Professional Judgment
ABC Workshop 2017
Kimberly Schwaeble – Rice University
Julie Wittmis – Texas Women’s University

2. What & why
To be eligible for FSA funds, a student must make Satisfactory Academic Progress, and your school must have a reasonable policy for monitoring that progress
The Department considers a satisfactory academic progress policy to be reasonable if it meets both the Qualitative and Quantitative criteria explained in this section.

3. Sap must . . .
be published and include reasonable qualitative and quantitative standards
explain how GPA and pace of completion are affected by course incompletes, withdrawals, and repeats, as well as transfer credits
be at least as strict as your SAP policy for student not receiving FSA funds

4. More sap must . . .
apply to all students (different SAP policies may apply to different programs)
require evaluation at the end of each payment period for program one year or less; annual evaluations required for program greater than a year
must notify and describe status that affects eligibility for FSA funds
must explain how to regain eligibility

5. Qualitative standard Grade based (Most commonly GPA)
Must achieve standard at the end of each period
In addition, HEA requires a specific review at the end of the 2nd academic year

6. Qualitative standard (cont’d)
Programs greater than 2 academic years
at least a “C” or its equivalent or,
Must have a academic standing consistent with your school’s graduation requirements

7. What’s so important about the EFC?

8. Quantitative standard
Time-related – maximum timeframe/hours
May use graduated completion percentages
May include but not required to include remedial courses
Total cumulative hours completed

9. Quantitative standard (cont’d)
Ensure program completion within the max timeframe
A Student is ineligible when it become mathematically impossible to complete the program within maximum timeframe
Appealable
What is your school’s minimum completion rate?
Is it the same for all students?

10. Let’s calculate BA requires 120 credits for graduation
Maximum Time Frame = 150% X 120 = 180 credits
Pace calculation :
120/180 = 67% (also 100/150 = 67%)
Student earning 67% of credits attempted is on pace to complete the program within the maximum time frame.
Applicable at any enrollment status

11. Change of Major & Transfer Credits
Generally, all periods of enrollment count
Even when not receiving FSA funds
May exclude courses not part of new major
May limit # of times student changes major
Must count transfer credits for current program
May count transfer grades
Establish rules for those who want new degrees
FAFSA on the Web has a threshold question that will cause the asset questions to be skipped when the student seems eligible for the simplified formula or an automatic zero EFC. But in some instances, such as when using a paper FAFSA, a student who qualifies for the simplified formula will provide asset information. In those cases the CPS will calculate two EFCs: one using the assets and one excluding them. The EFC from the simplified formula (which excludes assets) is called the primary EFC and is printed on the front of the student’s SAR, while the EFC from the full calculation is called the secondary EFC and is printed in the FAA Information section.

12. Repeat, Drop, Incomplete, Remedial & ESL Courses
Explain course repeats including which grade will count.
Quantitative standard includes all repeated courses
Policy must explain remedial, incomplete grades, and ESL course work
Cannot exclude course work from the Summer term or mini-terms

13. When do you check sap?
No longer than one academic year or the length of the program, whichever is less
Increments generally coincide with payment periods
New/conflicting information is received
A person need not have received the benefit for an entire year; receiving it at any time in the base or prior year qualifies. Also, an FAA may use professional judgment (PJ) to count a benefit if a person did not receive it during those 24 months but is receiving it now.

14. Regaining sap eligibility
Policy must explain how to regain eligibility
Placing them on probation
Submitting an appeal
Using non-FSA until all standard are met
Probation nor Appeals are required (may)
Sitting out a term doesn’t regain eligibility
Paying for one term doesn’t regain eligibility

15. Probation/warning status
Policy explains circumstance and procedures
Continue to receive FSA funding
Must regain eligibility by the end of the payment period
Cannot allow over two consecutive periods
See IRS Publication 17 page 7:
1040 – must use if there is income that cannot be reported on a 1040A or 1040 EZ – i.e. alimony, business/farm, capital gain or loss/rental property; itemized deduction on Schedule A
A foreign tax return counts as an IRS Form 1040, while a tax return for Puerto Rico, Guam, American Samoa, or the Virgin Islands counts as a Form 1040A or 1040EZ.

16. Appeal policy
Appeal - A process by which a student who is not meeting SAP petitions for reconsideration.
May have an appeal policy for mitigating circumstances, but not required
Appeal must explain mitigating circumstances and what has changed to ensure compliance going forward.
Approved appeals receive FSA funding
Must regain eligibility by your policy standards
30% food
22% housing
9% transportation
16% clothing
Before adjusting for an unusual expense, consider whether it is already covered by the IPA. Mention later during this presentation - PJs

17. Appeal policy (cont’d)
May have an appeal procedure
How the student may re-establish T4 eligibility
Basis for filing an appeal
Petition must include why the student failed to meet SAP, what has changed that will allow the student to meet SAP at the next review.

18. Evaluation frequency Warning at 1st violation*
FSA funds eligible
Ineligible at 2nd violation
FSA funds suspended
If appeal process offered & approved, FSA funds are reinstated
Probation: if can met SAP by the end of next period
Academic plan: if more than one period is need to met SAP
If no appeal process or declined, meet SAP using non-FSA funds
*May be ineligible if warning not offered
Ineligible at 1st violation
FSA funds suspended
If appeal process offered & approved, FSA funds are reinstated
Probation: if can met SAP by the end of next period
Academic plan: if more than one period is need to met SAP
If no appeal process or declined, meet SAP using non-FSA funds
Warning period not available

19. Academic plan
School and the student must define the steps needed to meet SAP standards by a specified time
Can also take the student to successful program completion
Review of progress at each SAP evaluation period
Must specify timeframe by which SAP standards must be met
Must appeal to change plan
Must explain what happened to make the change necessary and how they will be able to make SAP

20. Terms
Appeal – A process by which a student who is not meeting SAP petitions for reconsideration
FA probation – A status assigned to a student failing SAP and successfully appeals. Eligibility may be reinstated for one payment period.
FA warning – A status assigned to a student failing SAP. Eligibility may be reinstated for one payment period without an appeal. May only be used by schools that evaluate at the end of each period.

21. Terms (cont’d) Maximum timeframe
Undergraduate program (credit hours), cannot exceed 150% of published length of program
Undergraduate program (clock hours), cannot exceed 150% of published length of program, measured by cumulative # of clock hours required to complete
Graduate program, school defines based on the length of the program

22. resources FSA Assessments, Student Eligibility section:
668.16, (SAP)
FSA Handbook Vol. 1, Chapter 1
Electronic Announcement - September 2, 2011
Policy Q & A Webpage on program integrity regulations
y-qa.html
Upper right-hand side of IFAP
Topic – “Satisfactory Academic Progress”
y Academic Progress”

23. Professional Judgment
It’s Your Decision!

24. Discussion questions Is the school required to have an appeal process?
Is an institution required to use the same SAP policy for all students?
Qualitative & quantitative standards must always be applied how?
What is included in the Academic Plan?
Can a school limit the number of appeals?

25. resources Federal Register 668.34 (c); (d); (a) (3-7), (b)
Federal Student Aid Handbook
Volume 1- Student Eligibility, Satisfactory Academic Progress (SAP)
Program Integrity Final Rules
Industry Webinars

26. What is Professional Judgment?
Section 479A in the HEA authorizes us to use PJ

27. Examples of PJ Situations
Adjusting Cost of Attendance components
Adjusting data elements used to calculate EFC
Direct changes to EFC is not permitted
Performing a Dependency Override
Establishing eligibility for a dependent student to receive Federal Direct Unsubsidized loans if parent refuses to complete FAFSA and support student

28. Elements that CAN be Adjusted
AGI
Wages Earned
Taxes Paid
Number in Household
Number in College
Additional Financial Information
Untaxed Income
Asset information
Dislocated Worker Status
Federal Benefit Programs (i.e.- SNAP, WIC, TANF, etc.)
Dependency Status
Only for dependent to independent

29. First Rule of PJ is… DOCUMENT!
Keep in mind that all special circumstances must be verified first to ensure you start with accurate data
Types of documents you may wish to collect
Tax returns
W2s
Last pay stubs
3rd party documents
Legal documents
Letter from employers
AVG – 75: You must complete verification for a selected student before you exercise professional judgment to adjust any values that are used to calculate the EFC. But making a PJ adjustment does not require you to verify an application that isn’t selected. Institution’s preference to verify students who are not selected by ED ; however, ensure this is documented within institution’s policies and procedures.
If a student is not selected and data elements are change, must ensure is coded as a PJ to prevent CPS from selecting the student for verification.
AVG-82 When professional judgment (PJ) is used (and coded correctly) to adjust an application that is not selected for verification, the CPS prevents the subsequent transaction from being selected for verification.

30. Loss of Income and/or Additional Expenses

31. Types of Income Losses Loss of Income Additional Expenses
Extended family support
Such as nursing home expenses
Unusual medical/dental expenses that exceed 11% of the IPA
Unusual non- discretionary debt that exceeds 12% of the IPA
Private school costs for children in elementary or high school
Loss of Income
Unemployment or income reduction
Death of parent/spouse
Divorce of parent/student
Loss of child support
One-time lump sum payout
See GEN-09-04
Please refer to your institution’s policy for handling judgments related to Private school cost.
Private school cost- there is wide range of opinion about considering this cost due this cost can be considered as discretionary. Situations where family has no choice – religious school or medical, emotional, physical, or perhaps academic program reasons.

32. Medical Expenses Example
Hands on example:
Let’s say you have a dependent student whose parents experienced an annual medical expense totaling $5,000. The student has 4 in the household and 1 in college. How would you calculate how much of the $5,000 exceeds the 11% of the IPA?
$26,290*11%= $ then $5000-$ = $ is the amount you will remove from the AGI listed on the FAFSA

33. Dependency Overrides & Unsubsidized Stafford Eligibility
Authority given for dependency overrides HEA Section 480(d)

34. Dependency Overrides
Any student who answers “No” to all the dependency questions is dependent even if student is self-supporting
Students who have extenuating circumstances can request an FAA to consider a dependency override
Requires documentation to the validity of the extenuating circumstances
Personal statement
Letters from professionals
Remember: DOCUMENT, DOCUMENT, DOCUMENT!
CCRAA- must re-evaluate the following year
Per CCRAA, Schools have the authority to accept the dependency override that was performed and approved by another school without additional documentation.

35. Dependency Overrides Factors to consider Abandonment by parents
Unable to locate a parent after reasonable attempts
Situations of abuse
Abuse- threatens the student’s health and safety

36. Dependency Overrides
None of the following examples merit a dependency override:
Parents refuse to contribute to the student's education
Parents are unwilling to provide information on the FAFSA or for verification
Parents do not claim student as a dependent for income tax purposes
Student demonstrates total self- sufficiency

37. You be the Judge…
Laura is a first-time freshman living with her grandparents. She is not under legal guardianship, but she has been living with her grandparents since she was 5 when her father left the country. Her mother died when she was 2. She has had no contact with her father since she was 5 and neither has her grandparents, although he sent a check out of the blue when she turned 18 for $5,000.
Would you consider Laura independent?
Why or why not?
AVG-116
A third party that knows the student’s situation—such as a teacher, counselor, medical authority, member of the clergy, prison administrator, government agency, or court—should establish the unusual circumstances. Evidence can be a signed letter or an official document, such as a court order. If third party documentation is truly not available, the school may—though it is not required to—accept a signed and dated statement from the student or a family member detailing the unusual circumstances. Such a statement should be a last resort.

38. Federal Direct Unsubsidized Loan Eligibility
FAAs may use professional judgment to determine if a dependent student may be offered Federal Direct Unsubsidized loans without parental data on the FAFSA
To do this, FAAs must verify:
Parent no longer provides financial support
Parent refuses to file the FAFSA
FAA must collect a signed statement from the parent affirming the above while also certifying that they will not provide support in the future (Include the date support ended.)
FYI - If the parents refuse to sign and date a statement to this effect, you must get documentation from a third party (the student himself is not sufficient), such as a teacher, counselor, cleric, or court.

39. Cost of Attendance Adjustments
Budgets, budgets, budgets!

40. Standard COA Components
Tuition & Fees
Books & Supplies
Room & Board
Transportation
Personal Expenses

41. Types of Adjustments to Consider
Additional mortgage/rent charges
Unusual car repair or transportation costs
Dependent care costs
Computer/Laptop expenses
Unusual medical/dental expenses not covered by insurance
Cost need to occur during the award year
LTHT Budgets- cannot have personal cost such as computer/laptop expense – would not recommend making an adjustment

42. What you CANNOT do in a PJ
A PJ is award year specific and cannot carry forward from year to year unless subsequent request & documentation are received
You cannot directly change an EFC
You cannot make changes to the EFC formula
You may not establish automatic categories of special circumstances. All PJ must be conducted on a case by case basis.
PJ cannot be used to circumvent the law
PJ cannot be used to waive student eligibility requirements
PJ cannot make an Independent student dependent

43. Wrapping Up
Understanding the complexity of the EFC makes you an effective FAA!
You have the authority to use professional judgment so use it! (with proper documentation)

44. Resources
EFC Formula Guide EFCFormulaGuide1718.pdf
FSA Handbook, Application and Verification Guide, Chapter 5, Special Cases
DCL: GEN-09-04, GEN-09-05, GEN-11-04, GEN-11-15

45. Questions? Kimberly Schwaeble: KS56@rice.edu
Julie Wittmis: