Good Afternoon! Good Afternoon! Welcome to Welcome to

Professional Judgement: Professional Judgement: It’s Your DecisionIt’s Your Decision

Sit down…relax.Sit down…relax.We will begin We will begin

shortly.shortly.

© NASFAA 2000

Professional Judgement:Professional Judgement:It’s Your DecisionIt’s Your Decision

P.J. BasicsP.J. BasicsFall 2002 MASFAA ConferenceFall 2002 MASFAA Conference

Scott D. Lewis, Debt Management ConsultantScott D. Lewis, Debt Management Consultant

USA Funds ServicesUSA Funds Services

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Topics CoveredTopics Covered

Statutory Authority & EvolutionStatutory Authority & Evolution

Underlying ConceptsUnderlying Concepts

Principles of Need AnalysisPrinciples of Need Analysis

Professional Judgement PrinciplesProfessional Judgement Principles

Areas of Professional JudgementAreas of Professional Judgement

DocumentationDocumentation

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Statutory AuthorityStatutory Authority

Section 479A of the Section 479A of the Higher Education Act Higher Education Act provides the authority provides the authority for the financial aid for the financial aid administrator to exercise administrator to exercise discretion known as discretion known as “professional “professional judgement.”judgement.”

HEA Section 479A

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EvolutionEvolution

Higher Education Amendments of Higher Education Amendments of 1986 broadened professional 1986 broadened professional judgement authorityjudgement authority

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Underlying ConceptsUnderlying Concepts

Need Analysis used to Need Analysis used to allocate limited financial aid allocate limited financial aid resourcesresources

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Principles of Need AnalysisPrinciples of Need Analysis

Family responsible for college costFamily responsible for college cost Aid distributed based on ability to pay - Aid distributed based on ability to pay -

not willingnessnot willingness Ability to pay determined independent of Ability to pay determined independent of

college costcollege cost Horizontal vs. vertical equityHorizontal vs. vertical equity Snapshot approachSnapshot approach Need Analysis results are a benchmarkNeed Analysis results are a benchmark

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Correction, Update or Correction, Update or Adjustment?Adjustment?

CorrectionCorrection = FAFSA information initially = FAFSA information initially reported incorrectly can be correctedreported incorrectly can be corrected

UpdateUpdate = Initial FAFSA information which was = Initial FAFSA information which was correct when the FAFSA was filed, but has correct when the FAFSA was filed, but has since changed, can be updatedsince changed, can be updated

AdjustmentAdjustment = A financial aid administrator = A financial aid administrator wishing to make a change while exercising wishing to make a change while exercising professional judgement can make an professional judgement can make an adjustmentadjustment

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Professional JudgementProfessional JudgementPrinciplesPrinciples

Can use discretion in certain areas when a Can use discretion in certain areas when a student’s family has unique or student’s family has unique or extraordinary circumstancesextraordinary circumstances

Circumstances must differentiate an Circumstances must differentiate an individual student from a class of individual student from a class of studentsstudents

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Professional Judgement Professional Judgement Principles Principles (cont’d)(cont’d)

Must be made on an individual case-by-Must be made on an individual case-by-case basiscase basis

Across the board changes are not permittedAcross the board changes are not permitted Policies and procedures to objectively Policies and procedures to objectively

identify studentsidentify students Subjective - No wrong or right answerSubjective - No wrong or right answer You must make your own decisionYou must make your own decision

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Areas of Professional Areas of Professional JudgementJudgement

Dependency StatusDependency Status Data ElementsData Elements Cost of AttendanceCost of Attendance FFEL & Direct Loan FFEL & Direct Loan

EligibilityEligibility Satisfactory Academic Satisfactory Academic

ProgressProgress

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Cannot Use Professional Cannot Use Professional Judgement to:Judgement to:

Change a student’s status from Change a student’s status from independent to dependentindependent to dependent

Adjust the EFC directlyAdjust the EFC directly Alter the need analysis formula Alter the need analysis formula

or change table valuesor change table values

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Cannot Use Professional Cannot Use Professional Judgement to: Judgement to: (cont’d)(cont’d)

Create a new category of costsCreate a new category of costs Include expenses for post-enrollment Include expenses for post-enrollment

activities, such as bar examinations or activities, such as bar examinations or professional licensing fees, in the student’s professional licensing fees, in the student’s cost of attendancecost of attendance

Circumvent statutory FSEOG selection Circumvent statutory FSEOG selection criteriacriteria

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Documentation RequirementsDocumentation Requirements

You have the authority to You have the authority to request and use supplemental request and use supplemental informationinformation

Special circumstances and Special circumstances and action taken must be action taken must be documented in the student’s documented in the student’s filefile

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Purpose Purpose of of

DocumentationDocumentation

Provides additional Provides additional information and a history for information and a history for future referencefuture reference

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Two Types of DocumentationTwo Types of Documentation

A written request from A written request from the student andthe student and– LettersLetters

– BillsBills

– ReceiptsReceipts

– Pay StubsPay Stubs

– Other third party Other third party documentationdocumentation

A clear record of:A clear record of:– Decision made and how it Decision made and how it

was reachedwas reached

– Decision dateDecision date

– Description and date of Description and date of actions takenactions taken

– School policy and School policy and procedure citationprocedure citation

– Name and title of decision Name and title of decision makermaker

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Maintaining DocumentationMaintaining Documentation

Documentation may be maintained in paperDocumentation may be maintained in paper

or electronic filesor electronic files

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Impact of Packaging PoliciesImpact of Packaging Policiesand Available Fundsand Available Funds

Is there additional aid available to Is there additional aid available to meet the increased need?meet the increased need?

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Case StudiesCase Studies

The Big SpenderThe Big Spender You Never Know Who is ListeningYou Never Know Who is Listening Pickles or CollegePickles or College

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Professional Judgment:Professional Judgment:It’s Your DecisionIt’s Your Decision

Questions?Questions?