Professional Judgment in the Financial Aid Process

When students apply for financial assistance using the Free Application for Federal Student Aid (FAFSA), they must provide information under a fairly rigid set of guidelines. The application itself leaves little room for interpretation, and does not allow the student or parent to explain unusual circumstances that might impact on their ability to pay for college. However, each college’s Financial Aid Officer (FAO) has the authority under federal law to take special circumstances into account.

Under a provision called Professional Judgment, the FAO can make changes to a student’s financial aid application to take unusual situations into account. In other words, they can put the round pegs in the square holes. By overriding certain provisions in the eligibility process, they can modify the treatment of income or assets, consider unusual expenses, and even change the student’s dependency status. You can help your students by having a basic understanding of how professional judgment works.

When Does Professional Judgment Apply?
Professional judgment can be applied to a number of situations that are not addressed in the application process. This happens most frequently when the family experiences a change in family status or income after filing the FAFSA.

Here are some situations in which the FAO can exercise professional judgment:

1. Loss or reduction of employment, wages, or unemployment compensation
2. Loss of untaxed income or benefit (e.g. Social Security benefits or child support)
3. Separation or divorce of the student or parents
4. Death of a parent or spouse
5. Parent enrolled in college
6. Unusually high medical expenses

What Is The Process And What Documentation Is Required?
Parents or students experiencing these types of situations should contact the Financial Aid Officer at their postsecondary school. Each institution is required to develop general guidelines for utilizing professional judgment, and these guidelines usually include the types of documentation the school will require.

Typically the institution has a form that the family can complete to provide specific information regarding the situation. The review process will generally cover the student’s eligibility for federal and institutional forms of aid. It may also be necessary for the family to submit similar information to their state grant agency so that their situation can be reviewed for state-based aid as well.

Keep in mind that professional judgment is a process that takes place at each individual school. Therefore, if a student is considering more than one postsecondary institution, the process should take place with EACH school. The information requested by each school could differ, and the final decisions made by the schools could differ as well.

Does Every School Exercise Professional Judgment?
It is important to note that institutions have the authority to exercise professional judgment, but they are not required to use it. When used, professional judgment must be administered on a case-by-case basis. Therefore, it varies from student to student and college to college. Some schools use it frequently, while others use it sparingly or not at all. That’s why it is important to contact the school as soon as possible to begin a review of unusual circumstances.

What Is A Dependency Override?
The FAFSA has a set of questions designed to determine dependency for financial aid purposes. In most cases, the student’s status as dependent or independent is clear-cut. However, there may be situations in which the FAFSA does not accurately reflect the student’s circumstances. For example, if a student has been living with a guardian or relatives for an extended period of time, it may not be reasonable to track down the biological parents and have them complete the FAFSA. At the same time, it may not be reasonable to expect the guardian or relatives to be responsible for the cost of the student’s college education. Therefore, the FAO could use professional judgment to declare the student to be independent, thereby "overriding" the dependency status.

Keep in mind that dependency overrides fall under professional judgment and are a school-based decision. Extensive documentation will likely be required. Also, a student deemed independent by one FAO might be considered dependent by another.

If you have a student who is in an unusual living situation, contact the FAO at all colleges the student is considering to begin a review of dependency status before the FAFSA is filed by the student. This will make FAFSA completion much easier.

As you can see, professional judgment provides Financial Aid Officers with the ability to take unusual circumstances into account; however, there are no clear-cut rules for how it happens or what the results will be. Students with unusual circumstances should be advised to contact the Financial Aid Office at the institutions they are considering as soon as possible so that a review of their situation can begin.