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Professional Judgment

It is the intent of the Coast Community College District to provide assistance to those students who require a professional judgment ruling regarding their individual circumstances.

The Free Application for Federal Student Aid (FAFSA) does not provide families with a place to explain special circumstances affecting their ability to pay for the student's education. The Federal Need Analysis Methodology (FM) is likewise a rigid formula, with no provisions for exceptions. To remedy this, Congress has delegated to the school's financial aid administrator the authority to compensate for special circumstances on case-by-case basis with adequate documentation. As the man or woman in the field, the financial aid administrator is best able to evaluate the family's situation and to make appropriate adjustments.

Professional Judgment refers to the authority of a school's financial aid administrator to make adjustments to the data elements on the FAFSA and to override a student's dependency status. The school does not have the authority to change the need analysis formula itself or to make direct adjustments to the Expected Family Contribution (EFC). Instead, the school may make adjustments to the inputs to the formula. The changes to the inputs are dictated by the impact of the special circumstances on the family's income and assets. The standard formula is then applied to the new data elements, yielding a new EFC figure.

The decision of the financial aid administrator is final. There is no appeal. By law, neither the school's president nor the US Department of Education can override the financial aid administrator's decision.

Related Information

The Coast Community College District colleges will use professional judgment in the following cases:

  1. Income Reduction
  2. Dependency Overrides

All professional judgment cases will be reviewed by the financial aid appeal committee and will be submitted by the student on the appropriate form by the published deadline date.

Legislative Authority

The authority to conduct professional judgment reviews is granted by sections 479A and 480(d)(7) of the Higher Education Act of 1965. Section 479A is concerned with the authority to adjust data elements of the FAFSA application and the authority to refuse to certify a student loan. Section 480(d)(7) is concerned with the authority to override a student's dependency status. It is worth noting that the term unusual circumstances is used only in connection with dependency overrides. In the section dealing with adjustments to data elements, the term special circumstances is used instead, with the word unusual only being used in connection with "unusually high child care costs". The word unusual means uncommon or rare. Although the word special is sometimes used as a synonym for unusual, it also includes qualities that readily distinguish an item from among others of the same category. An item need not be rare in order to be special. (Note also the use of the word other in Section 480(d)(7) of the Higher Education Act, as in "other unusual circumstances", is an indication that the six automatic methods of achieving independent student status are exemplars of unusual circumstances. This means that even with dependency overrides, the word unusual does not require extreme extenuating circumstances.) Congress's choice of language appears to have been quite deliberate, to allow for conditions that distinguish a student from among a class of students but which are not necessarily rare.

Minimal Guidance from US Department of Education

Section 479A includes language that is interpreted as prohibiting the US Department of Education from providing guidance to financial aid administrators on the use of professional judgment. Doing so would limit the authority of the financial aid administrator to make adjustments, and that is specifically excluded by the Higher Education Act. However, section 480(d)(7) is not included within the scope of these prohibitions, so the Department has given guidance on the appropriate use of dependency overrides. Specifically, this guidance has been provided in Dear Colleague Letter GEN-03-07 and repeated in the Verification Guide section of the Federal Student Aid Handbook.

The Department also provided some guidance in Dear Colleague Letter GEN-98-2 (cannot modify EFC formula and the role of the Income Protection Allowance), Dear Colleague Letter GEN-99-10 (dislocated workers, Roth IRA), Dear Colleague Letter GEN-06-10 (529 plans and prepaid tuition plans held by a grandparent or non-custodial parent are generally disregarded) and the Counselor's Handbook (overview, examples of reasonable and unreasonable adjustments, and the role of the Income Protection Allowance).

Dear Colleage Letter GEN-09-04 encourages colleges to use professional judgment to help families during challenging economic times (layoffs and wage/hour reductions, income loss from a prospective student's voluntary separation from a job or reduction in work hours to return to school, costly medical situations, losing a home to foreclosure; encourages colleges to proactively reach out to families). The Department has also published worksheets that schools can use to review their PJ practices and conflicting information policies. But generally the Department treads lightly in matters relating to professional judgment, for fear of substituting their judgment for that of the financial aid administrator.

Nevertheless, PJ decisions by financial aid administrators are examined during program reviews. Abuse of the discretion accorded to financial aid administrators can result in the institution being held liable to repay funds awarded because of an inappropriate adjustment.

The US Department of Education has issued two dear colleague letters (DCL GEN-09-04 and DCL GEN-09-05) in connection with the economic downturn. The US Department of Education announced on May 21, 2010 that these two dear colleague letters "continue to be in effect for the 2010-11 award year and subsequent award years until further notice."

  1. The first dear colleague letter encourages college financial aid administrators to proactively contact families that have been affected by the economy to let them know about the availability of professional judgment. It emphasizes that while it is not permissible to "establish automatic categories of special circumstances and provide identical treatment to all students in that circumstance", it is ok to perform outreach to a category or class of students provided that the review of any professional judgment appeals is on a case-by-case basis. The letter notes that job loss can include a voluntary separation or reduction in work hours: "A changed circumstance certainly includes the loss of a job or a reduction in work hours or wages, but it also includes, for example, the income loss associated with a prospective student's decision to leave the workforce or to reduce work hours in order to return to school." The letter discusses the substitution of estimated future income for prior tax year income in the event of a job loss or salary cut. It also states that it is appropriate to "use information that realistically reflects the individual's and/or family's current and near-term economic situation"
  2. The second letter focused on the treatment of unemployment insurance benefits. This letter states that documentation of a student's current receipt of unemployment insurance benefits may be used to justify setting the income earned from work for that student to zero during the current period of economic hardship. The documentation must be dated within the last 90 days. The letter also allows colleges to treat unemployment benefits as zero income for independent students as "the maximum unemployment benefits available would not have a material impact on the Expected Family Contribution of an independent student". (This appears to be the first time the US Department of Education has adopted a material difference standard.)