Publication Date: May 8, 2009
Subject: Update on the use of "Professional Judgment" by Financial
Aid Administrators
Summary: This letter provides information to financial aid administrators regarding
their ability to exercise, if properly documented, professional judgment when
determining the eligibility of a student for federal student aid. It also informs
aid administrators about letters that will be provided to all recipients of
unemployment insurance benefits by state unemployment agencies that can be used
by a financial aid administrator to document special circumstances of students
during these challenging economic times.
Dear Financial Aid Administrator:
On April 2, 2009, we posted to our Information for Financial Aid Professionals
(IFAP) Web site a Dear Colleague Letter (GEN-09-04) reminding you of your authority
as a financial aid administrator, pursuant to section 479A of the Higher Education
Act, to make adjustments, on the basis of adequate documentation and on a case-by-case
basis, to address circumstances not reflected in a student's Free Application
for Federal Student Aid (FAFSA). We know that you may already have been using
documentation from state unemployment offices as part of your professional judgment
determinations. However, I am writing to provide additional guidance and tell
you about a step that each state's unemployment agency, in conjunction with
the U.S. Department of Labor, is taking that will help you assist individuals
and families struggling in these difficult economic times.
Many recently unemployed individuals do not know that they may now be eligible
for Federal Pell Grants and other need-based student aid. Most do not know of
your ability to adjust financial aid eligibility based on their special circumstances.
Because of the severity of the economic recession, the U.S. Department of Labor
has been working with the states so that each state will send a letter to all
recipients of unemployment insurance benefits to encourage them to consider
enrolling in postsecondary education and applying for financial aid.
During this period of economic hardship, you may use the letter from the state
unemployment agency, or other evidence that a student is receiving unemployment
benefits, to document that the income earned from work of that student is zero
for the purposes of adjusting data items for the student on the student's federal
financial aid application. For purposes of implementing this letter only, unemployment
benefits can also be considered zero as the Department of Education, in consultation
with the Department of Labor and the Office of Management and Budget, has determined
that the maximum unemployment benefits available would not have a material impact
on the Expected Family Contribution of an independent student. If there are
other members of the student's family for whom you may have evidence of their
receiving unemployment benefits, we encourage you to examine the totality of
the family's economic situation and make any appropriate adjustments. Unemployed
individuals will be able to present letters for 90 days from the date of issuance
of those letters to an aid administrator for consideration under this guidance.
(The letter should not be accepted if you know that an applicant already has
obtained other employment.) Other verification of current receipt of unemployment
benefits is an acceptable substitute for the state unemployment agency letter.
We know that many financial aid administrators have been reluctant to use professional
judgment because the Department has used the percentage of students for whom
a professional judgment determination has been made as part of its risk-based
model to select institutions for program reviews. For the 2008-09 and 2009-10
award years, the Department will make appropriate adjustments to its risk-based
model. We will continue to monitor and enforce requirements for appropriate
use of professional judgment, but recognize that appropriate use of professional
judgment by a school is likely to increase in the current economic environment.
As long as you retain in your student records a valid letter, as described above,
or other evidence of current receipt of unemployment insurance benefits from
a state unemployment office, we will consider that to be adequate documentation
for the adjustment to the student-recipient's income.
In addition, the Departments of Education and Labor have established a Web
site to assist those who are recently unemployed. That site is http://www.opportunity.gov.
If you have questions regarding the information provided in this letter, please
contact Carney McCullough by phone at (202) 502-7639 or by e-mail at carney.mccullough@ed.gov.
Thank you in advance for your cooperation as together we provide opportunities
to ensure that all Americans have the opportunity to participate in our country's
outstanding postsecondary education system.
Sincerely,
/s/
Arne Duncan
Attachments/Enclosures:
GEN-09-05: Update on the use
of "Professional Judgment" by Financial Aid Administrators in PDF
Format, 17KB, 2 pages
Posted 05/11/09 to www.NASFAA.org. Please submit Web site questions or comments to Web@NASFAA.org
