The Higher Education Opportunity Act of 2008, or HEOA, broadened the professional judgment (PJ) authority financial aid administrators may exercise by authorizing the awarding of unsubsidized Stafford Loans to dependent students without parental data. As noted in GEN-08-12, this use of PJ is not a dependency override since the parent's refusal to complete the Free Application for Federal Student Aid (FAFSA) is not sufficient reason for to make an otherwise dependent student independent.
Even if the parent refuses to provide data on the FAFSA, the student must still complete the application to establish his or her eligibility for Title IV aid. The Department of Education (ED) has modified FAFSA processing to allow a dependent student to submit the form without parental data. The Central Processing System will not reject a FAFSA if the student indicates that he or she is not providing parental data, but it will not calculate an expected family contribution, or EFC. A comment will appear on the student's output document indicating that the student should contact the financial aid office about his or her eligibility. A similar comment will appear on the student's Institutional Student Information Record, alerting the financial aid administrator to the student's situation.
Before awarding a dependent student without parental data unsubsidized Stafford Loans, the financial aid administrator must collect a signed and dated statement from one of the student's parents specifically stating that the parent(s):
- Has stopped providing financial support to the student (including the date when financial support stopped);
- Will not provide financial support in the future; and
- Refuses to complete the parental section of the FAFSA.
The parent does not need to provide a reason for ending financial support or refusing to complete the FAFSA. Also note that financial support includes not only the payment by the parent of educational expenses, but also other cash and non-cash support for the student, including room and board. If the student's parent(s) refuses to provide a written statement, the financial aid administrator must obtain documentation from a third party such as a teacher, counselor, or clergy describing the student's relationship with his or her parents.
Before making a decision to award the student unsubsidized Stafford Loan funds, the financial aid administrator may, but is not required to, determine how the student intends to support himself or herself without parental support.
Members of the community should also be aware of a few additional points when exercising this aspect of PJ authority. First, the ability to award a dependent student unsubsidized Stafford Loan funds applies only to situations in which the parent refuses to complete the FAFSA. The financial aid administrator cannot perform a PJ to award unsubsidized funds to a student whose parents refuse to submit verification documents or cease support after providing information on the FAFSA. Secondly, a student's loan eligibility is limited to his or her base annual loan limit plus the $2,000 authorized by the Ensuring Continuing Access to Student Loans Act of 2008 (ECASLA). Dependent students without parental data are not eligible for the additional unsubsidized loan amounts available to independent students and dependent students whose parents are unable to borrow a PLUS Loan. For example, a first-year student would be eligible for an unsubsidized Stafford Loan of up to $5,500--$3,500 from the base annual loan limit for his grade level plus the $2,000 authorized by ECASLA. Finally, like all other professional judgment decisions, this authority may only be exercised for one award year at a time. The financial aid office must document that the dependent student's parents have ceased all support and refuse to complete the FAFSA each year before exercising its PJ authority to award an unsubsidized Stafford Loan.
The Department of Education has modified Common Origination and Disbursement (COD) System functionality to process unsubsidized Stafford Loans awarded to students without parental data. Regardless of which loan program the school participates in, financial aid staff should work with its third party software vendor to ensure that these loans are processed accurately and in a timely fashion.
NASFAA staff discussed the issue of awarding unsubsidized Stafford Loans to dependent students without parental data in its June 11 Webinar, "Professional Judgment: It's Still Your Decision." You still have time to purchase access to the archived recording, including handouts and frequently asked questions. For more information, visit the NASFAA Webinar Center.
By Jennifer Martin
NASFAA Assistant Director for Professional Assessment, Training, and Regulatory Assistance
Posted 08/19/09 to www.NASFAA.org. Redistribution to non-NASFAA institutions is prohibited. Please submit Web site questions or comments to Web@NASFAA.org.
