Professional Judgment 101
2008 CASFAA CONFERENCE, ANAHEIM
Craig Yamamoto, Director of Financial Aid
California State University, Sacramento
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Agenda
Professional Judgment Overview
 Special Circumstances
 Professional Judgment Prohibitions
 Professional Judgment Case Studies
 Best Practices

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Definition of Professional Judgment

The process of evaluating a student’s
exceptional circumstances according to the
technical and ethical principals of federal
student aid.
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Authorization: HEA Sec. 479A(a)
Nothing in this part shall be interpreted as limiting the authority of the financial aid
administrator, on the basis of adequate documentation, to make adjustments on a case-bycase basis to the cost of attendance or the values of the data items required to calculate the
expected student or parent contribution (or both) to allow for treatment of an individual
eligible applicant with special circumstances. However, this authority shall not be construed
to permit aid administrators to deviate from the contributions expected in the absence of
special circumstances. Special circumstances may include tuition expenses at an elementary
or secondary school, medical or dental expenses not covered by insurance, unusually high
child care costs, recent unemployment of a family member, the number of parents enrolled
at least half-time in a degree, certificate, or other program leading to a recognized
educational credential at an institution with a program participation agreement under section
487, or other changes in a family’s income, a family’s assets, or a student’s status. Special
circumstances shall be conditions that differentiate an individual student from a class of
students rather than conditions that exist across a class of students. Adequate
documentation for such adjustments shall substantiate such special circumstances of
individual students. In addition, nothing in this title shall be interpreted as limiting the
authority of the student financial aid administrator in such cases to request and use
supplementary information about the financial status or personal circumstances of eligible
applicants in selecting recipients and determining the amount of awards under this title. No
student or parent shall be charged a fee for collecting, processing, or delivering such
supplementary information.
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Principles of Professional
Judgment
Allows FAA limited flexibility on a case by
case basis
 Subjective
 Philosophical approaches

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Special Circumstances
Elementary or secondary school tuition
expenses
 Medical or dental expenses not covered by
insurance
 Unusually high child care costs
 Recent unemployment of a family member
 Divorce
 Death

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Special Circumstances (continued)

Dependency status


Need Analysis


HEA, Section 480(d)
HEA, Section 479A
Denial/reduction of Stafford Loan eligibility
34 CFR 682.603(e)
 34 CFR 685-301(a)(7)


Satisfactory Academic Progress

34 CFR 668.16(e)
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Special Circumstances (continued)
No limit to FAA to request and use
supplementary information about financial
status or personal circumstances in
selecting recipients and determining amount
of awards
 No student or parent shall be charged a fee
for collecting, processing, or delivery such
supplementary information

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Professional Judgment Prohibitions
Professional Judgment cannot be used to:
 make an independent student dependent
 create a new cost category in the Cost Of
Attendance (COA)
 directly adjust the EFC
 change the EFC formula
 make across the board changes
 make an otherwise ineligible student eligible
for Title IV aid
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PJ Prohibitions (continued)
Professional Judgment cannot be used to:
 circumvent the intent of law or regulations
 circumvent the FSEOG selection criteria
 include expenses related to post-enrollment
activities in COA

Exception: Allowance for one time direct costs of
obtaining first professional license or certificate
 Cost must be incurred during period of enrollment
 May only be provided one time per student per
eligible program
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Documentation

Adequate documentation
Supports student’s request for special
circumstances
 Clearly supports FAA’s decision making process
 Provides history of special circumstances for
future reference

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PJ Case Study – Dependency
Status
WALL-E will be a junior in 2008-09. He is 21 years old, and for the
2006-07 and 2007-08 award years he was independent because he was
married. In October 2007, WALL-E and his wife divorced and WALL-E
moved back home with his parents. He and his wife filed a joint federal
tax return for 2007. They had a combined income of $25,000 in 2007,
$3,000 of which was his income from a Federal Work-Study job. He
expects to earn about the same in 2008.
WALL-E’s parents are providing a place for him to live, but they claim
that they cannot contribute toward his educational costs since they are
also supporting WALL-E’s younger sisters who are both in high school.
WALL-E’s parents earned $40,000 in 2007.
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PJ Case Study – EFC Adjustment
EVE is 18 years old and will be a freshman in college in 2008-09. In
2007, her father received a $10,000 bonus for being his company’s top
salesperson. In addition, EVE’s mother appeared as a contestant on a
TV quiz show and won $5,000, which the family reported on their 2007
tax return. EVE’s father does not expect to receive a bonus in 2008. In
fact, his company is downsizing and he could be laid off. Also, the
family used EVE’s mother’s winnings to pay off the balance of a car
loan. Her parents’ income in 2007 was $60,000. They estimate that
their 2008 income will be around $48,000.
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PJ Case Study – Federal Loan
Denial
Bolt, an independent student, is enrolled in his forth year of an
educational program leading to employment in a field with relatively low
earnings potential. Bolt has already accumulated over $45,000 in
Stafford Loan debt. Would you deny or reduce any subsequent loans?

FAAs may on a case-by case basis refuse to certify/originate the loan
or certify/originate a loan for an amount lesser amount.

Decisions must not constitute a pattern or practice that denies access
to borrowers because of race, sex, color, income, religion, national
origin, age, handicapped status or selection of a particular lender or
guarantor.

Cannot limit loans only in the amount needed to cover school charges
or limit unsubsidized Stafford borrowing by independent students.
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Applying PJ to SAP
ED guidance allows schools to exercise PJ to determine that an individual
student who does not meet the qualitative and/or quantitative progress
standards is maintaining SAP if there are mitigating circumstances in that
student’s case.

If SAP appeal is approved, eligibility applies to all Title IV programs

Can add conditions for individual or group of students
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PJ Case Study - SAP
Belle has completed her junior year at Ballroom College, and she
performed poorly. She failed three of her courses, took an incomplete
in two, and earned “D” grades in the others. At the end of her
freshman year she had a cumulative 1.9 grade point average (GPA).
At the end of Belle’s sophomore year, her GPA was just over a 2.0. Her
current GPA no longer meets Ballroom College’s satisfactory academic
progress requirements, and she is also deficient by seven credit hours.
Early in the school year Belle became pregnant and encountered
physical complications which resulted in her missing quite a bit of
school. Belle has filed an appeal of her SAP determination.
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Best Practices

Understand how the use of PJ will impact
the student
Documentation
 COA adjustment
 Projected year income
 EFC vs. Financial need

Update Policies and Procedures
 Train staff
 Inform students and parents

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Questions?
Thanks for
coming and
enjoy the
Conference!
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