ED Encourages Appropriate Use of Professional Judgment Related to Move to PPY

By Joan Berkes, Policy & Federal Relations Staff

The Department of Education (ED) reminded institutions that financial aid administrators have the authority to adjust the financial information used to determine eligibility for federal student aid when they judge that an applicant has special circumstances that affect his or her ability to contribute to the cost of education.

In Dear Colleague Letter GEN-16-03, posted February 11, ED explained that the move to prior-prior year (PPY) income as the basis for calculating the expected family contribution may increase the number of appeals for adjustments under the aid administrator’s professional judgment (PJ) authority.

The letter assured aid administrators that it is appropriate “to consider if the use of prior-prior year income is the best predictor of income for the upcoming award year.” The letter gave as an example a case where a family member has lost a job or taken a significant salary cut beginning in August of 2015. In such a case, the financial aid administrator may use the income for the 12-month period following the reduction in income (September 2015 through August 2016) instead of the prior-prior year income (calendar 2015) that was initially used in the EFC calculation. Adjustments may also increase income: the financial aid administrator could choose to use income more recent than the prior-prior year if he or she believes it more accurately reflects the family's current financial circumstances, if, for example, the student or parent moved from part-time employment to full-time employment.

The letter also reminded schools of two basic tenets of PJ use: all adjustments must be properly documented, and all adjustments must be made on a case-by-case basis, limited to special circumstances. While financial aid administrators may identify a category of students with similar circumstances to consider for a possible professional judgment adjustment (for example, a recent military deployment that affects income), each applicant must be individually assessed to determine whether the effect on that particular family warrants special treatment and what that treatment should be.

Schools are sometimes hesitant to use PJ authority due the increased likelihood of program review. To account for the possibility of an increased use of PJ, ED announced in the letter that it will adjust the risk-based model it uses to review and analyze the use of professional judgment.


Publication Date: 2/16/2016

Edward M | 2/16/2016 12:10:02 PM

Using income from 2 years ago will most certainly result in more differences in income from then to now, creating a much bigger administrative burden for schools' financial aid offices. So, why aren't the Feds doing something to offset this by decreasing some of the other administrative burdens they have placed upon us previously? It seems like they just want to add more and more of the burden upon the schools and students.

Feudi P | 2/16/2016 11:21:39 AM

Prior prior year only serves to complicate an already complicated situation. The feds never should have gone down this road. But what can we expect from a bureaucracy whose main goal is to grow itself rather than help students.

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