The Latest Guidance on Professional Judgments

By Rick Cox

We are providing guidance below on the Professional Judgment process, including documentation requirements. It is important to remember that institutions cannot have a policy to deny all PJs. They must consider all PJ requests submitted. Additionally, institutions must disclose publicly on their website that students may pursue an adjustment based on special or unusual circumstances. Institutions must also notify students of the outcome of their request. Institutions approving a special circumstance PJ must set the FAA Adjustment Flag on the student’s ISIR. Institutions approving an unusual circumstances PJ must use the Dependency Override code of “1” on the ISIR.

There are two types of PJs. Please note: a student may have both types for the same award year.

Unusual Circumstances – Formerly known as a Dependency Override. Colleges can override a student’s dependency status and make them independent.

• Institutions may use a dependency override (unusual circumstances) approval by another institution made for the same award year or prior award year.
• Beginning in 2024-2025, students who indicate unusual circumstances will be able to complete and submit the FAFSA under a provisional independent status and will have a provisional SAI. The college must determine if a PJ is warranted to override the dependency status and make the student independent.
• Colleges may presume any student who has obtained a PJ approval for unusual circumstances to be independent for each subsequent award year at the same institution, unless the student informs the institution that their circumstances have changed, or the institution has conflicting information about the student’s independence.
• Institutions must review all requests for unusual circumstances as soon as practicable but no later than 60 days after the student enrolls.
• An unusual circumstance approval will carry forward on the student’s FAFSA for subsequent award years following 2024-2025.
• Institutions must obtain documentation before approving a PJ. Documentation may include:
  - A documented interview with the student
  - A court order or official documentation that the student’s parents or legal guardian are incarcerated
  - A documented phone call or written statement from an attorney, a guardian, a court-appointed special advocate (or similar) or a representative of a TRIO or GEAR UP program that confirms the circumstances
  - Utility bills, health insurance or other documents that demonstrate a separation from parents or legal guardians
  - Documented phone call or written statement confirming the unusual circumstance with:
  ▪ A state, county or tribal welfare agency
  ▪ An independent living case worker who supports current and former foster youth with the transition to adulthood, or
  ▪ A public or private agency, facility or program serving the victims of abuse, neglect, assault or violence.

Special Circumstances – Refers to financial situations (loss of job, etc.). Institutions can adjust data elements used in calculating the SAI, such as adjusting the AGI and taxes paid due to a job loss or reduction of income. Institutions may also adjust components of the COA to allow for additional expenses.

• Must be done on a case-by-case basis
• Only valid at the school performing the PJ
• If the student is selected for verification, you must complete verification before processing the PJ. However, the school is not required to verify items that will be entirely removed through the PJ process
• A PJ is not permitted after a student is no longer enrolled
• Must obtain documentation before approving a PJ. Documentation may include:
  -A statement from the student or a documented interview with the student
  -Additional documentation about the financial circumstances for which the request is being made. This can include tax documents, W-2s and evidence of unemployment compensation.

More information on Professional Judgment is available in the FSA Handbook, Application and Verification Guide, Chapter 5 – Special Cases. The Department of Education also issued DCL GEN-22-15 to provide guidance on changes made by the FAFSA Simplification Act, which included changes to Professional Judgment.

Rick Cox is Global’s Executive Director of Regulatory Affairs and Compliance