Session #10 Professional Judgment (PJ)...PJ Overview • PJ & Verification • Do: complete...

35
Session #10 Professional Judgment (PJ) Annmarie Weisman U.S. Department of Education 2019 FSA Training Conference for Financial Aid Professionals December 2019

Transcript of Session #10 Professional Judgment (PJ)...PJ Overview • PJ & Verification • Do: complete...

Page 1: Session #10 Professional Judgment (PJ)...PJ Overview • PJ & Verification • Do: complete verification before PJ . if. a student is selected for verification • Don’t: submit

Session #10

Professional Judgment (PJ)

Annmarie WeismanU.S. Department of Education

2019 FSA Training Conference for Financial Aid Professionals

December 2019

Page 2: Session #10 Professional Judgment (PJ)...PJ Overview • PJ & Verification • Do: complete verification before PJ . if. a student is selected for verification • Don’t: submit

2

Abbreviations

• Adjusted Gross Income (AGI)• Code of Federal Regulations (CFR)• Cost of Attendance (COA)• Expected Family Contribution (EFC)• Financial Aid Administrator (FAA)• Free Application for Federal Student Aid (FAFSA)

Page 3: Session #10 Professional Judgment (PJ)...PJ Overview • PJ & Verification • Do: complete verification before PJ . if. a student is selected for verification • Don’t: submit

3

Abbreviations (cont.)

• Higher Education Act (HEA)• Income Protection Allowance (IPA)• Institutional Student Information Record (ISIR)

• Professional Judgment (PJ)

Page 4: Session #10 Professional Judgment (PJ)...PJ Overview • PJ & Verification • Do: complete verification before PJ . if. a student is selected for verification • Don’t: submit

4

Agenda

• PJ Resources• PJ Overview• Adjustments: COA & EFC Data Elements • Dependency Override• Parent Refusal to Complete FAFSA and

Provide Support• Denying/Reducing Direct Loans

Page 5: Session #10 Professional Judgment (PJ)...PJ Overview • PJ & Verification • Do: complete verification before PJ . if. a student is selected for verification • Don’t: submit

5

PJ Resources

PJ in the Law:

HEA Sec. 479A: Special circumstance authorityHEA Sec. 480(d)(7): Dependency Override

Page 6: Session #10 Professional Judgment (PJ)...PJ Overview • PJ & Verification • Do: complete verification before PJ . if. a student is selected for verification • Don’t: submit

6

PJ Resources

PJ Regulations:generally none, but…34 CFR 685.301(a)(8) Denying/Reducing Direct Loans

PJ Guidance: FSA HandbookApplication and Verification Guide, Ch. 5

Page 7: Session #10 Professional Judgment (PJ)...PJ Overview • PJ & Verification • Do: complete verification before PJ . if. a student is selected for verification • Don’t: submit

7

PJ Resources

Dear Colleague Letters – all are “GEN”03-07 & 11-15 - Dependency Overrides08-12 - Refusal to Provide FAFSA Data & Support09-04 - PJ & Family Financial Circumstances09-05 - PJ for Unemployment Benefits11-04 - Extends 09-04 & 09-0511-07 - Denying/Reducing a Direct Loan16-03 - Prior-Prior Year and PJ

Page 8: Session #10 Professional Judgment (PJ)...PJ Overview • PJ & Verification • Do: complete verification before PJ . if. a student is selected for verification • Don’t: submit

8

PJ Overview

Key Concepts:• cannot limit the FAA’s authority• adequate documentation• case-by-case adjustment• COA or EFC data items elements• treatment of special circumstances

Page 9: Session #10 Professional Judgment (PJ)...PJ Overview • PJ & Verification • Do: complete verification before PJ . if. a student is selected for verification • Don’t: submit

9

PJ Overview

DO: • Make award-year specific decisions• Collect “adequate documentation”• Use third-party documentation when

possible…but remain flexible

Page 10: Session #10 Professional Judgment (PJ)...PJ Overview • PJ & Verification • Do: complete verification before PJ . if. a student is selected for verification • Don’t: submit

10

PJ Overview

DO NOT:• directly change an EFC or the EFC formula• establish categories of special

circumstances and apply PJ to the group

Page 11: Session #10 Professional Judgment (PJ)...PJ Overview • PJ & Verification • Do: complete verification before PJ . if. a student is selected for verification • Don’t: submit

11

PJ Overview

DO NOT:• circumvent regulations or the law• use PJ to waive eligibility requirements• use PJ to make an independent student

dependent

Page 12: Session #10 Professional Judgment (PJ)...PJ Overview • PJ & Verification • Do: complete verification before PJ . if. a student is selected for verification • Don’t: submit

12

PJ Overview

• Institutional Policy• Using PJ is optional• Establish an institutional policy if using

• Who has the authority?• Internal appeals permitted?• Circumstances you will (or won’t consider)

Page 13: Session #10 Professional Judgment (PJ)...PJ Overview • PJ & Verification • Do: complete verification before PJ . if. a student is selected for verification • Don’t: submit

13

PJ Overview

Documentation Examples (one or more…)-Tax Document-Earnings Statement-Bank Statement-Credit Card Statement-Receipt-Insurance Document-Agency Document-Court Document

-Letter-Signed Statement-Birth Certificate-Death Certificate-Police Report-Contract-Provider Statement-Other appropriate item

Page 14: Session #10 Professional Judgment (PJ)...PJ Overview • PJ & Verification • Do: complete verification before PJ . if. a student is selected for verification • Don’t: submit

14

PJ Overview

• PJ & Verification• Do: complete verification before PJ if a student

is selected for verification• Don’t: submit verification & PJ on the same day• After receiving the verified ISIR, use the

resulting ISIR transaction to do PJ

Page 15: Session #10 Professional Judgment (PJ)...PJ Overview • PJ & Verification • Do: complete verification before PJ . if. a student is selected for verification • Don’t: submit

15

Adjustments

• COA elements [p. 1 of 2]• Tuition and Fees• Books and Supplies• Transportation• Miscellaneous Personal Expenses

Page 16: Session #10 Professional Judgment (PJ)...PJ Overview • PJ & Verification • Do: complete verification before PJ . if. a student is selected for verification • Don’t: submit

16

Adjustments

• COA - other elements [p. 2 of 2]• As applicable:

• Dependent Care• 1st time Professional Licensure Costs• Study Abroad Costs• Disability-related expenses

Page 17: Session #10 Professional Judgment (PJ)...PJ Overview • PJ & Verification • Do: complete verification before PJ . if. a student is selected for verification • Don’t: submit

17

Adjustments

IPA:• Understanding IPA helps when deciding whether

to adjust an EFC data element • IPA is an allowance value in the EFC formula

that reduces AGI• Determine IPA by reviewing the student’s ISIR

under Intermediate Values (labeled IPA)

Page 18: Session #10 Professional Judgment (PJ)...PJ Overview • PJ & Verification • Do: complete verification before PJ . if. a student is selected for verification • Don’t: submit

18

Adjustments

IPA:• Before PJ, consider the amount allotted

to the expense• Income & Asset Protection• Allowances for state and other taxes,

employment expenses, etc.

Page 19: Session #10 Professional Judgment (PJ)...PJ Overview • PJ & Verification • Do: complete verification before PJ . if. a student is selected for verification • Don’t: submit

19

Adjustments

IPA Values:• 30% for food• 22% for housing• 9% for transportation• 16% for clothing and personal care• 11% for medical expenses• 12% for other family consumption

Page 20: Session #10 Professional Judgment (PJ)...PJ Overview • PJ & Verification • Do: complete verification before PJ . if. a student is selected for verification • Don’t: submit

20

Adjustments

IPA Example 1 – PJ or not?• Student IPA = $30,000• The formula allots 11% ($3,300) for medical

expenses • Student documentation shows $2,500 for

medical expenses not covered by insurance• Would you use PJ?

Page 21: Session #10 Professional Judgment (PJ)...PJ Overview • PJ & Verification • Do: complete verification before PJ . if. a student is selected for verification • Don’t: submit

21

Adjustments

IPA Example 2 – PJ or not?• Student IPA = $30,000• The formula allots 9% ($2,700) for

transportation• Documentation shows $3,600 for monthly train

passes to get to and from school• Would you use PJ?

Page 22: Session #10 Professional Judgment (PJ)...PJ Overview • PJ & Verification • Do: complete verification before PJ . if. a student is selected for verification • Don’t: submit

22

Adjustments

IPA Example 3 – PJ or not?• Student IPA = $30,000• The formula allots 11% ($3,300) for medical

expenses • Student documentation shows $10,300 for

medical expenses not covered by insurance• Would you use PJ?

Page 23: Session #10 Professional Judgment (PJ)...PJ Overview • PJ & Verification • Do: complete verification before PJ . if. a student is selected for verification • Don’t: submit

23

Dependency Override

HEA Sec. 480(d)(7)• may consider a student to be independent

when the student does not otherwise qualify in one or more of the FAFSA categories

• the FAA determines independence based on other unusual circumstances

Page 24: Session #10 Professional Judgment (PJ)...PJ Overview • PJ & Verification • Do: complete verification before PJ . if. a student is selected for verification • Don’t: submit

24

Dependency Override

• Independent Student – FAFSA items• age 24 or older• married (or separated but not divorced)• working on master’s/doctorate program• active duty in the U.S. armed forces • veteran

Page 25: Session #10 Professional Judgment (PJ)...PJ Overview • PJ & Verification • Do: complete verification before PJ . if. a student is selected for verification • Don’t: submit

25

Dependency Override

• Independent Student – FAFSA items• child(ren) for whom you provide more

than 50% the support• other dependents who live with you and

you provide more than 50% of the support

Page 26: Session #10 Professional Judgment (PJ)...PJ Overview • PJ & Verification • Do: complete verification before PJ . if. a student is selected for verification • Don’t: submit

26

Dependency Override

• Independent Student – FAFSA items• both parents deceased/foster care/ward

of the court• emancipated minor/guardianship• unaccompanied youth who was

homeless or self-supporting and at risk of being homeless

Page 27: Session #10 Professional Judgment (PJ)...PJ Overview • PJ & Verification • Do: complete verification before PJ . if. a student is selected for verification • Don’t: submit

27

Parent Refusal to Complete FAFSA & Support

• Option for dependent students to receive Direct Unsubsidized Loan when parents ended financial support and refuse to file the FAFSA• Annual loan eligibility limited to base

unsubsidized annual loan limit + $2,000 of additional unsubsidized loan funds.

Page 28: Session #10 Professional Judgment (PJ)...PJ Overview • PJ & Verification • Do: complete verification before PJ . if. a student is selected for verification • Don’t: submit

28

Parent Refusal to Complete FAFSA & Support

• Must obtain documentation/statement that:• Parents refuse to complete the FAFSA and do

not and will not provide any financial support, including the date the support ended

• Consider family auto and/or health insurance coverage, tuition payments, tax status, etc.

Page 29: Session #10 Professional Judgment (PJ)...PJ Overview • PJ & Verification • Do: complete verification before PJ . if. a student is selected for verification • Don’t: submit

29

Parent Refusal to Complete FAFSA & Support

• May accept third-party documentation if parents refuse to provide documentation

• Student must complete the FAFSA• Refusal to provide support and complete

the FAFSA does not justify a dependency override unless other documented circumstances exist

Page 30: Session #10 Professional Judgment (PJ)...PJ Overview • PJ & Verification • Do: complete verification before PJ . if. a student is selected for verification • Don’t: submit

30

Denying/Reducing Direct Loans

• Statute: HEA Section 479A(c) • Requirements [p. 1 of 2]

• case-by-case basis• May refuse to certify a Direct Loan• May certify a loan amount less than the

student’s determined of need

Page 31: Session #10 Professional Judgment (PJ)...PJ Overview • PJ & Verification • Do: complete verification before PJ . if. a student is selected for verification • Don’t: submit

31

Denying/Reducing Direct Loans

• Statute: HEA Section 479A(c)• Requirements [p. 2 of 2]

• Must document the reason and provide it in writing to the student

• May not discriminate (protected classes -race, national origin, religion, sex, marital status, age, or disability status)

Page 32: Session #10 Professional Judgment (PJ)...PJ Overview • PJ & Verification • Do: complete verification before PJ . if. a student is selected for verification • Don’t: submit

32

Denying/Reducing Direct Loans

• Regulations - 34 CFR 685.301(a)(8) [p. 1 of 2]• May, on a case-by-case basis:

• refuse to originate a Direct Loan• reduce the amount of the loan

• Must document the action and provide to the borrower in writing

Page 33: Session #10 Professional Judgment (PJ)...PJ Overview • PJ & Verification • Do: complete verification before PJ . if. a student is selected for verification • Don’t: submit

33

Denying/Reducing Direct Loans

• Regulations - 34 CFR 685.301(a)(8) [p. 2 of 2]• Retain documentation supporting the decision

in the student’s file• May not engage in any “pattern or practice”

that denies access to a Direct Loan due to race, gender, color, religion, national origin, age, disability status, or income

Page 34: Session #10 Professional Judgment (PJ)...PJ Overview • PJ & Verification • Do: complete verification before PJ . if. a student is selected for verification • Don’t: submit

34

Denying/Reducing Direct Loans

• Reminders:• Consult with your institution’s legal counsel,

risk manager, and/or senior leaders• Ensure coverage for COA elements when

limiting the amount of loans borrowing• The amount of debt does not correlate with an

increased likelihood of default

Page 35: Session #10 Professional Judgment (PJ)...PJ Overview • PJ & Verification • Do: complete verification before PJ . if. a student is selected for verification • Don’t: submit

35

Questions and Answers