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FAFSA, special circumstances, professional judgement

Understanding Your Options: Special Circumstances and Professional Judgments

June 1, 2023

By: Diana Crump, FAS Consultant

Navigating special circumstances and Professional Judgments in financial aid can often feel overwhelming for professionals, given the unique nature of each case. However, it doesn’t have to be that way. When faced with a student who has special circumstances, having a clear understanding of your options empowers you to provide the utmost assistance to the student. By exploring the available avenues, you can ensure that you’re doing everything possible to support your students in their financial aid journey.

A student asks if they can get more financial aid because they are having financial difficulties. What can you do?

Talk to the student about their situation. Getting a thorough understanding of the student’s circumstances and checking their Free Application for Federal Student Aid (FAFSA) for the current Expected Family Contribution (EFC) is the first step.

If the student does not already have a zero EFC, and the request is the result of a job loss or reduction in income for the student or the parents of a dependent student, an EFC adjustment may be in order. In addition, one-time items that show as income on taxes, such as a Roth IRA conversion, can be considered for EFC adjustment.

If the request is due to unusual expenses, for categories such as medical or childcare, a cost of attendance (COA) adjustment may be helpful. This should be considered only after reviewing the Income Protection Allowance (IPA) for the appropriate expense category for that student to determine whether their expenses exceed the percentage already included in the IPA.

Dependent students have additional layers of complexity in the financial aid process due to the expectation of parent involvement. Some parents are absent or refuse to participate in the financial aid process, but when is a dependency override appropriate?

For 2022-23, if a student has unusual circumstances such as abuse, abandonment, or inability to locate the parents, a dependency override is appropriate. However, the FAFSA Simplification Act has broadened unusual circumstances warranting dependency override for the 2023-24 aid year. Unusual circumstances now include human trafficking; legally granted refugee or asylum status; parental abuse, abandonment, or estrangement; inability to locate parents; and student or parental incarceration; and other guidance has changed for 2023-24 as well. As always, the guidance is found in the Federal Student Aid Handbook, Application and Verification Guide, Chapter 5, Special Cases.

For dependent students whose situations do not include the unusual circumstances listed above, but who are self-supporting and have parents who refuse to participate in the financial aid process, the student can receive aid, but only dependent-level unsubsidized loans.

When speaking to a dependent student in a difficult situation, don’t forget to ask about housing. If the student has temporary or inadequate housing, you may be able to make the determination that they qualify as unaccompanied homeless youth, even if they did not answer yes to this question when they completed the FAFSA.

While professional judgments are made on a case-by-case basis, the key to all of them is documentation. Be sure to thoroughly document a student’s unique circumstances in compliance with the guidance provided in the FSA Handbook.

Understanding a student’s individual circumstances, and your own options for assisting them, can have a profound impact on whether a student is able to afford college. Don’t be afraid to use your professional judgment as a valuable tool to help your students.

Your institution could use an additional layer of support to give your students the individual attention they deserve. What can you do?

FAS supports your institution in navigating special circumstances and professional judgments with ease. Our experienced team of experts are ready to provide customized solutions tailored to your institution’s unique needs. Take the next step with FAS and enhance your financial aid processes and improve student outcome. Contact us today for a consultation. Together, we can make a meaningful difference in the lives of your students.

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Creating and Maintaining an Effective Financial Aid Appeals Process

May 25, 2023

By: Sean Hudson, Sr Consultant

In an ideal world, higher education would be accessible to all without financial barriers. However, until we reach that point, it is crucial for educational institutions to make education affordable for students. This is achieved through strategic packaging of financial aid at various discount rates and the utilization of Professional Judgements when the Free Application for Federal Student Aid (FAFSA) does not accurately reflect a student’s or family’s financial situation. By establishing a solid appeal process, we can further extend opportunities for students and parents to pursue their educational aspirations.

Increasing Demand for Appeals:

With the transition to Prior-Prior FAFSA years and the recent Higher Education Emergency Relief Fund (HEERF) funding, the number of Professional Judgements and appeal requests has surged. Educational institutions must adapt to meet this growing demand for financial assistance.

Strategic Approach to Appeals:

When dealing with appeal requests, it is vital to approach the process strategically. Begin by understanding the available budget and determining if a separate budget item for appeals exists. By collaborating with the Finance Office and potentially the Admissions Office, you can present a comprehensive statement and showcase the potential return on investment (ROI). Demonstrating how providing additional funding can lead to increased enrollment and revenue generation over multiple years is an effective strategy.

Developing an Effective Process:

To ensure transparency and streamline the appeal process, it is imperative to establish a clear and accessible written process. This process should be prominently displayed on the college website and include information on application requirements, necessary supporting documentation, the review timeframe, and communication methods for notifying students of the decision. Specify the review committee composition, without divulging individual names, to provide reassurance and credibility. Additionally, define the amount or range of funding available for appeals, balancing the students’ needs while considering the institution’s budgetary limitations. Clearly communicate whether the appeal grants are one-time disbursements or can be expected annually.

Leveraging Partnerships:

Collaborating with the Alumni Relations Office responsible for awarding Endowed Scholarships can optimize the appeal process. Utilize the appeal process to identify suitable recipients for specific donor scholarships, thereby saving appeal budget funds by redirecting them towards endowed scholarships.

Monitoring and Fiscal Responsibility:

To ensure efficient utilization of appeal funds, implement regular monitoring of the awarding process. Stay vigilant in identifying students who have secured full funding through other means. It is essential to allocate sufficient funds for the spring semester, unless the policy explicitly states that appeals are exclusively granted in the fall. Consider the previous year’s awarded funds and track them accordingly, while also monitoring new students who do not enroll to reallocate those funds for future appeals.

Maintaining Transparency and Managing Expectations:

Once you begin awarding funds through the appeal process, anticipate an increase in applications, as students often share information with their peers. Transparent communication and a well-defined process become even more critical in managing expectations and maintaining a fair and equitable system. Additionally, recognize that students who previously received Professional Judgements may become appeal applicants, particularly if the initial adjustment resulted in only a minimal increase in aid.

Unlocking Potential: Benefits of a Well-Designed Appeal Process:

A well-crafted appeal process can yield numerous benefits for educational institutions. It can effectively boost new student enrollment, contribute to student retention, increase revenue through enrollment growth, and enhance the institution’s reputation for prioritizing student well-being. Investing time and effort into developing a robust process, even if it requires revamping an existing one, will undoubtedly yield long-term rewards.

As the pursuit of accessible higher education continues, educational institutions must proactively adapt their financial aid processes to meet the needs of students and families. By implementing a transparent and effective appeal process, colleges and universities can create an environment that fosters educational opportunities, supports student success, and upholds their commitment to providing a quality education for all.

Are you looking for expert guidance and support in optimizing your institution’s financial aid processes? Contact FAS today!

The Whole Institution Approach: Mitigating Risks and Achieving Compliance in Student Aid Administration

May 18, 2023

By: Bob Covey-Robbins, FAS Sr. Consultant

An institution’s eligibility for administering federal student aid is critically important, and everyone must understand that compliance with federal regulations is an institutional responsibility and not just a financial aid responsibility. When we review the top audit and program review findings published by the US Department of Education we find that lack of compliance often falls outside the financial aid office’s responsibility. Let’s look at a few examples.

Audit Finding #2 and Program Review Finding #1: Student Status – Inaccurate/Late Reporting

Accurate enrollment reporting is important. The student status effective date drives when student loan repayment begins, or when a deferment should become effective. If a student has been repaying their loans and returns to school at least half-time, then their loan repayments can be deferred, so the student may cease making payments while they are furthering their education. If the school, however, fails to report that the student is now enrolled, then the lender or servicer of the loan continues to expect payments, and if the enrollment fails to be reported too long, the student can suffer undue consequences like negative impact to their credit rating, and is determined to be delinquent or in default on their loans.

Enrollment reporting is generally the responsibility of the Registrar or Student Records department, but problems are found as part of the Title IV Audit or Program Review.

Audit Finding #3 and Program Review Finding #2: Return to Title IV (R2T4) Calculation Errors

The Financial Aid Office is usually responsible for calculating R2T4, revising awards, and informing students of their responsibilities. However, the R2T4 calculation relies heavily on the student’s withdrawal date. For an unofficial withdrawal where a student stops attending classes, the R2T4 calculation may rely on accurate reporting of the student’s last date of attendance. Responsibility for accuracy of the calculation then, is a shared responsibility between Financial Aid, Faculty, and the Registrar.

Audit Finding #6 and Program Review Finding #3: Student Credit Balance Deficiencies

Federal regulations require the separation of responsibility for awarding/authorizing federal student aid awards and disbursing the funds, so again, we have shared responsibility between departments. The Financial Aid office has its set of rules and regulations to follow when determining a student’s eligibility, and the Bursar or Business Office has a separate set of rules and regulations to follow when applying funds to institutional charges and delivering excess funds to the student.

Program Review Finding #9: Consumer Information Requirements Not Met

This is a finding that can involve many different departments of an institution of higher education. Specific information and how the information is made available is complex and perhaps the best example of how Title IV compliance is an institutional responsibility. Besides the financial aid information that must be distributed or made available to students, Title IV regulations also require much information from other departments such as an Annual Fire Safety Report, Annual Security Report, Completion or Graduation Rates, Constitution Day and Citizenship Day program, Drug and Alcohol Abuse Prevention Program, Athletic Program Participation Rates and Financial Support Data, and the list goes on.

Managing Compliance

Maintaining Title IV compliance in the Financial Aid Office is complex and requires continual attention, and the responsibilities of Title IV compliance outside the Financial Aid Office make it even more daunting. Compliance can be considered much like a person’s general health, which requires day-to-day attention with regular check-ups. Many schools consider it valuable to have a regular, impartial, external review of their overall compliance. It’s better to find and close compliance gaps with a regular compliance check-up than to have them exposed in an audit or program review.

7 Successful Strategies that Increase Financial Aid Retention Rates

May 11, 2023

By: FAS Staff

Offer and promote financial literacy and education programs: Many students who drop out of college or struggle to repay student loans do so because they lack financial literacy skills. By offering financial education programs and resources, financial aid offices can help students better manage their finances and make informed decisions about borrowing and repayment.

Personalized communication and outreach efforts: Financial Aid Services Reported that 86% of first-generation students use some type of Financial Aid. Financial aid offices should try to communicate with students and families in a personalized and targeted way, taking into account their individual needs and circumstances. This can include using student-specific messaging and offering individualized counseling sessions on a rotating semester base.

Streamline and Simplify awarding process: The financial aid process can be hard to navigate, and complex and confusing financial aid processes can discourage students from applying or accepting financial aid awards. By simplifying and streamlining these processes, financial aid offices can make it easier for students to receive and accept financial aid.

Monitor academic progress and provide support: Financial aid offices should monitor academic progress and provide support to students who are struggling academically. This can include offering academic counseling, tutoring, and other support services to help students succeed.

Encourage involvement in campus activities and organizations: Students who are involved in campus activities and organizations are more likely to stay enrolled and graduate on time. Financial aid offices can encourage involvement by providing information about campus events and organizations and offering support for extracurricular activities.

Offer incentives for meeting academic milestones: Financial aid offices can offer incentives such as book stipends, meal plans, grants, or other financial rewards for students who meet academic milestones such as maintaining a certain GPA or completing a certain number of credit hours.

Monitor and address non-academic factors that can impact retention:
Non-academic factors such as mental health, housing, and food insecurity can impact a student’s ability to stay enrolled and succeed academically. Financial aid offices should be aware of these factors and provide support and resources to address them.

diverse group sit for training and cross training meeting

How Much Training is Enough?

May 4, 2023

By: Robert “Bob” Covey-Robbins, Sr. Consultant

How much training is enough for a financial aid office? How often do we need to provide updated training to staff? One of the top concerns that we often hear from financial aid staff is that they don’t get enough training.

Consistent and Comprehensive Training.

Financial aid training is not a “one-and-done” endeavor. It requires a consistent effort to stay up to date on financial aid policy. In 2022, just looking at federal sources, there were 86 Federal Registers, 24 U.S. Department of Education Dear Colleague Letters, and 196 Department of Education Electronic Announcements, all related to the administration of Title IV Student Financial Aid programs. If a school doesn’t have a training program to share all these updates with appropriate staff, then there are likely compliance gaps in existence that could result in significant risk.

Implementing Cross-Training.

Depending on a school’s size and level of automation, some functions within a financial aid office may be somewhat specialized with staff having specific programmatic or functional oversight. It’s important, however, that program expertise is not siloed to the point that when an individual becomes unavailable their program cannot continue. Cross-training and sharing of responsibilities is a good insurance policy against silo risk.

Training can also be a key element in succession planning. If recruiting efforts don’t always produce the experienced financial aid professional that was sought, a school may have to change its strategy to recruit someone who has the right basic skills and train them on the financial aid programs.

Combating Staffing Shortages.

Many schools are dealing with staff shortages and difficulty in filling vacant positions. This has been particularly true since the “Great Resignation” brought on by the COVID-19 pandemic began. However, it’s not a brand-new situation. Recruiting and retaining qualified staff for financial aid, business offices, and other student service departments is continually a concern for schools.

Coming up with a salary and benefits package that will attract the ideal candidate who is positive, fast-thinking, detail-oriented, problem-solving, knowledgeable of an amazingly complex set of federal, state, and institutional laws, regulations, policies, procedures, and practices, and consistently delivers world-class student service, while continually collaborating with and building successful working relationships with other administrators, faculty, staff, and the public in general, is challenging, to say the least.

If a school doesn’t have a person who is tasked with coordinating, preparing, and delivering training, then it may need to look externally for the training that is needed. FAS understands the importance of consistent and updated training for financial aid staff, especially in the face of constantly changing policies and regulations. We help institutions stay up-to-date with financial aid best practices.

Is your Financial aid office feeling the effects of staff shortages? Our services are designed to create systems and processes to assist with routine training and updates, ensuring that your financial aid office operations run smoothly. Learn more about how we can help your financial aid office stay compliant and up-to-date with the latest regulations and compliance requirements. Contact Us.

3 Tips for Managing Transitions in Leadership within The Office of Financial Aid

April 19, 2023

Challenges Deserve Solutions: Rethinking the Financial Aid Services Model

April 17, 2023

Win-Win Approach to Dealing with Difficult Students

August 22, 2022

One size does not fit all when it comes to working with students and their needs surrounding how to finance and pay for their education. Every student interaction brings unique circumstances, capabilities, and concerns to the table. While in many cases questions are easily answered and issues resolved, other times students or parents are not able to meet institutional requirements or are dissatisfied with the answers they’ve received.

Dealing with difficult customers is not unexpected particularly at the start of a new academic year. Whether it’s financial aid packages that don’t meet expectations, not being allowed to register for classes because of an outstanding balance, getting conflicting information from different offices, or just not being able to reach institutional staff by phone or email, this stressful time of year can impact student retention, outstanding receivables, or just engender bad feelings about the institution.

At a time when quality service is more than an expectation, staff and supervisors face the wrath and ire of many customers. Depending on the time of year and institutional deadlines or organizational structures, these customers are not only students and their parents, but may extend to prospective students, alumni, faculty members, or even colleagues in other institutional offices. With enrollment, financial and workforce pressures on colleges and universities, maintaining service delivery standards and satisfaction can challenge both staff and senior leadership.

To maintain quality service standards, institutions now must also factor in needs related to diversity, equity, and inclusion (DEI) that have moved into the forefront of the higher education experience. Treating your students and constituents with a consistent approach should not mean that every experience and interaction is similar. At the same time, it’s important to respect and note how differences in culture, knowledge, and experiences may require different styles and techniques in service delivery and counseling.

That’s why it is important that we “listen to hear” what our customers are saying and how we subsequently respond to their needs. Not only is it critical to be timely and accurate in responding, but it’s also vital that someone owns the customer’s issues and concerns. Too often, failures to listen, understand, and answer these concerns creates escalated conflicts and complaints.

Using every customer interaction to anticipate other questions/concerns and educate students on what to do (and how to do it) can lead to more on-time payments, higher satisfaction levels, reduced complaints, and increased student success.

Perkins Loan Closeout – Assignment Extension

May 22, 2022

As part of the wind down of the Perkins Loan Program, the Department of Education (ED) requires institutions to assign to the Department all Perkins Loans that have been in default for more than two years. Unless the school has documentation that these borrowers are making payments toward their Perkins loan debt, you are required to assign all Perkins Loans in default for more than two years to the ED. The previous deadline of June 30, 2022, has been extended to June 30, 2023.

ED provides guidance on the Perkins loan assignment process in the Perkins Assignment and Liquidation Guide. ED will provide a school with the reason why any loan is rejected for assignment. If the school can resolve that issue(s), the loan can be resubmitted for assignment. In instances when an issue cannot be resolved and assignment is not possible, the school must purchase that loan.

Federal regulations state that ED may require a school to reimburse its Federal Perkins Loan Program Fund for the entire amount of the outstanding principal balance, plus any accrued interest on loans ED determines to be unenforceable.

ED reminded schools that although the Perkins Loan Program is winding down, they remain obligated to ensure all collection procedures, outlined in the regulations, are being followed.

Suspicion of Malware Suspends Federal System Access

February 1, 2022

Two institutions have recent had their access to all federal databases and websites suspended. In both instances, a user attempted to log in to a secure federal website from an older computer whose antimalware and anti-virus software were not current. The U.S. Department of Education’s security system detected “key logging” (recording a computer user’s keystroke activity, often to gain fraudulent access to passwords and other confidential information).

The U.S. Department of Education has specific technical requirements for computer hardware and software that interface with federal systems.

Officials from both colleges have contacted offices within the U.S. Department of Education and the Federal Student Aid Customer Support requesting their access be restored. The reactivation process has several levels of approval from multiple authorities and could take an extended amount of time to complete. Without required access, financial aid administrators cannot exchange any electronic files with federal processors or make record-level updates. Likewise, business officers are unable to
access the G-5 system to draw down federal funds.