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OFFICE OF POSTSECONDARY EDUCATION Professional Judgment Carney McCullough

Professional Judgment Carney McCullough

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Professional Judgment Carney McCullough. Professional Judgment. Areas to which professional judgment applies Dependency override Expected family contribution Cost of attendance Unsubsidized loan eligibility—new FFEL/DL denial Satisfactory academic progress. Dependency Override. - PowerPoint PPT Presentation

Text of Professional Judgment Carney McCullough

PowerPoint PresentationDependency override
Independent student is defined in section 480(d) of the HEA
Meets one of eight criteria specified in the HEA and reflected on the FAFSA, or
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Documented!
Dependency Override
Conditions that do NOT qualify as “unusual circumstances” individually or in combination
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 the student as a dependent for income tax purposes
Student demonstrates that he or she is totally self-sufficient
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Examples that may constitute “unusual circumstances”
Student’s voluntary or involuntary removal from parents’ home due to an abusive situation that threatened the student’s safety and/or health
Incapacity of parents such as incarceration or a disability or mental or physical illness
Inability of the student to locate the parent(s) after making reasonable efforts
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Documentation—cont’d.
Should obtain supporting documentation from a third party with knowledge of the unusual circumstances. Includes—
Counselors or teachers
Documentation—cont’d.
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You may make an otherwise dependent student, independent
You may not make an independent student, dependent
Annual determination—must affirm each year that the unusual circumstances still exist
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Dependency Override
Effective for the 2009-10 award year, a financial aid administrator may rely on a dependency override performed by another institution for the same award year.
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What would you do?
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What would you do?
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Expected Family Contribution
Cost of Attendance
Section 479A of the Higher Education Act of 1965, as amended—
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Expected Family Contribution
Cost of Attendance
Examples of special circumstances listed in section 479A of the HEA—
Elementary or secondary school tuition expenses
Medical, dental, or nursing home expenses not covered by insurance
Unusually high child or dependent care costs
Recent unemployment of family member or independent student
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Expected Family Contribution
Cost of Attendance
Examples of special circumstances listed in section 479A of the HEA—cont’d.
Family member or student is a dislocated worker
Parents enrolled in college
Change in housing status resulting in homelessness
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Examples are just that:
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Vacation expenses
Tithing expenses
Standard living expenses such as utilities, cable bills, credit card payments, children’s allowances
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Must have adequate documentation
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Encourages FAAs to consider special circumstances during these challenging economic times
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Dear Colleague Letter GEN-09-05 May 8, 2009
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Must adjust a data element in the formula (e.g. AGI)
May not—
Change the formula itself (e.g. asset conversion rate) or the tables
Make an adjustment to the PC, SC, or EFC
Make the adjustment on the initial FAFSA
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Must first resolve any conflicting information before making an adjustment
Must verify base year data if selected for verification
Adjustment is only valid at the school making it
Must use resulting EFC consistently for all FSA funds
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Increases as family size increases
Decreases as number in college increases
For dependent students
For independent students without dependents other than a spouse
Single and married with both in college
2008-09 = $6,050
2009-10 = $7,000
2008-09 = $ 9,700
2009-10 = $11,220
Sam is the only family member in college
IPA is $24,220
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Expected Family Contribution
What would you?
Susie is a dependent student who lives with her mother and sister
Susie is the only family member in college
Susie’s mother has incurred credit card debt of $8,000
IPA is $19,150
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Increases with the age of the parent/independent student
Deducted from net worth
Asset Conversion Rate
Independent student
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$100,000 net value rental home
+ 5,000 savings
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What would you do?
Mary’s parent s own a rental home with a net worth of $100,000
The rental home burns down
Family loses potential rental income
Upcoming insurance settlement
Transportation
Disability related expenses
Study abroad expenses
Cooperative education expenses
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Less than half-time students—
Dependent care
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Tuition and fees
Transportation
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Incarcerated students—
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Elementary/Secondary school tuition bills
Pay stubs
Not a chance!
Unsubsidized Loan Eligibility
The Higher Education Opportunity Act of 2008 (HEOA) amended section 479A of the HEA to allow FAAs to offer a dependent student an unsubsidized FFEL/DL without parental data being provided on the FAFSA if the FAA verifies that—
The parent or parents of such student have ended financial support of the student, and
The parents refuse to file such form
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Unsubsidized Loan Eligibility
New provision was effective upon enactment of the HEOA—August 14, 2008
Eligible for base amount for grade level & additional $2,000
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Has stopped providing financial support and date
Will not provide financial support in the future
Refuses to complete parental section of FAFSA
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What would you do?
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FFEL/DL Certification
An institution may refuse to certify or may reduce the borrower’s determination of need.
Must be done on a case-by-case basis
Reason must be documented and provided to the student in writing
Documentation must be retained in student’s file
No discrimination
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Satisfactory Academic Progress
An institution may determine that a student is making SAP although the student does not have the appropriate GPA at the end of the second year if the institution determines that student’s failure to meet the requirements is due to—
Death of a relative
Other special circumstances
Must be documented!
Contact Information
We appreciate your feedback and comments. I can be reached at:
Phone: 202-502-7639
Email: [email protected]
Fax: 202-502-7874