Part: 2 - - The Application Process
SectionTitle: Using Professional Judgment
Using Professional Judgment
An FAA may use professional judgment, only on a case-by-case basis, to either increase or decrease one or more of the data elements used to calculate the EFC. The reason must be documented in the student's file and it must relate to that student's special circumstances that differentiate an individual student (not to conditions that exist for a whole class of students).
A notice on the first page of the FAFSA instructions tells the student to notify the FAA if he or she has special circumstances. The FAFSA gives examples of elementary or secondary school tuition, unusual medical or dental expenses, a family member who recently became unemployed, or other unusual circumstances. Use of professional judgment is neither limited to the situations mentioned nor required in those situations.
An FAA may not make a direct change to the EFC figure, assessment rates, or allowances; he or she may adjust only an actual data item in keeping with the student's special circumstances. For example, if a family member is ill, an FAA might modify the AGI to allow for lower earnings in the coming year or might adjust assets to indicate that family savings will be expended on medical expenses. Because items like medical expenses and tuition do not appear on the application or the SAR or ISIR, FAAs need to be familiar with the elements in the formula to make and document professional judgment changes properly.
Occasionally an FAA makes a decision contrary to the professional judgment provision's intent. Unreasonable judgments have included, for example, reductions of income based on reoccurring costs such as vacation expenses, tithing expenses, and standard living expenses (related to utilities, credit card expenses, children's allowances, and the like). FAAs, whom the Department grants significant latitude in exercising professional judgment, are expected and required to make "reasonable" decisions that support the intent of the provision. The school is held accountable for all professional judgment decisions made, and it must fully document each decision.
In making adjustments for unusual expenses, an FAA should keep in mind that the income protection allowance is already included in the EFC calculation to account for modest living expenses. The FAA should consider whether the expense is already taken into account through the income protection allowance before making an adjustment. In general, a school can assume that 30% of the income protection allowance amount is for food, 22% for housing, 9% for transportation expenses, 16% for clothing and personal care, 11% for medical care, and 12% for other family consumption. The income protection allowance used for a particular student is provided as one of the intermediate values in the FAA Information Section of the output document (labeled as "IPA"). See also The EFC Formula Book, 1998-99 for tables listing income protection allowances.
If an FAA makes an adjustment for a student who may be eligible for a Federal Pell Grant, the FAA should use the EDE corrections function or the SAR to send the adjusted information to the CPS. The FAA is not required to submit the adjustment to the CPS unless the amount of the student's Pell Grant changes as a result. If the FAA uses EDE, the school will receive the resulting ISIR, and the student will receive the one-page SAR Information Acknowledgement. If the FAA uses the SAR, the school will receive the resulting ISIR, and the student will receive a SAR. An adjustment to a line item is made just like a correction. If the FAA uses the SAR, he or she reports the adjusted amount on Part 2 in the column labeled "WRITE IN ONLY NEW OR CORRECTED INFORMATION." The FAA must also indicate in the "School Use Only" box that an adjustment is being made. (See the chart on page 25.)
If an FAA uses professional judgment to adjust a SAR line item, he or she must use the resulting EFC consistently for all federal student aid awarded to that student. For example, if the FAA adjusts the EFC for purposes of awarding the student's Federal Pell Grant, that adjusted EFC must also be used to award all other federal student aid to that student.
An FAA can also use professional judgment to adjust the student's COA.
As mentioned, a student sometimes has unusual circumstances that may justify a dependency override. An FAA may override only from dependent to independent. However, if an independent student is receiving substantial support from his or her parents, an FAA may use professional judgment to adjust one or more of the FAFSA data elements, such as untaxed income. To reverse a dependency override, the FAA must use the transaction on which the override was done.
All dependency overrides must be made on a case-by-case basis, and the reason for the adjustment must be documented in the student's file.
A student receiving a dependency override fills out the gray and white areas of the FAFSA (the sections for independent students). An FAA then authorizes the dependency override by marking the oval for an override, filling in the school's Title IV School Code, and signing in the School Use Only box. A separate letter attached to the application (in lieu of making the override) is not acceptable.
An FAA may also use the SAR to override the dependency status of a student who has already applied by using the School Use Only box on Part 2. The FAA should check Box 1 in the section labeled D/O, fill in the school's Title IV School Code, and sign.
An FAA may also use the SAR or EDE to cancel a dependency override that another FAA performed. He or she mark Box 2 in the section labeled D/O on the SAR or follow the prompts provided in EDE.