Special Circumstances and Financial Aid

Special Circumstances and Financial Aid Michele Rizzo Assistant Director of Financial Aid Canisius College

Non-Traditional Families

Widowed or single • Single – only report the financial information for with whom the student lives. • If one parent has died, the parental questions are only about the surviving parent. • Do not report any financial information for the deceased parent on the FAFSA

Divorced or Separated • Report the information of the parent with whom the student lived with longer during the 12 months prior to the date completes the FAFSA is completed, regardless of who claimed as an exemption on the tax return. • Separated is defined as when one of the partners has left the household for an indefinite period and the marriage is severed. Does not have to be a legal separation. • If parents live together, they can’t be considered informally separated

Parents not married but living together • The parent responsible for completing the FAFSA is the parent with whom the student lived with most during the 12-month period ending on the FAFSA application date. • If the student lived with both parents equally, then the parent who provided the most support during this 12-month period is responsible for completing the FAFSA. • The other parent cannot be counted in the household size unless he/she receives more than half of his/her support

Blended Families • Father/Step-Mother or Mother/Step-Father • Parent with whom student lived. • A step-parent is treated like a biological parent • A pre-nup does not exempt the step-parent from providing information on the FAFSA. • FAFSA must include child support received from other parent

Parent’s Live-in Boyfriend/Girlfriend • If the state doesn’t consider their situation to be a common-law marriage, then they aren’t married. NYS does not recognize common-law. • Live-in partner income does not have to be reported on the FAFSA.

Living with Grandparents • Grandparents are not considered to be parents on the FAFSA unless they have legally adopted the student

Adoption • An adoptive parent is treated just like a biological parent.

Foster Parents • A foster parent or a legal guardian is not treated as a parent for federal aid purposes • A student who was at any time since the age of 13 a foster child or a ward of the court is independent even if her status has changed later.

Same-Sex Marriage • Not considered married for federal aid regardless of whether they are married under state law. • A child of a same-sex couple is considered to only have one parent for federal aid

Undocumented Students • Undocumented students are ineligible to receive federal and New York State financial aid • However, individual colleges and universities may award their own institutional aid • If the student was born in the US but parents are undocumented, the student is eligible for aid. However, parents would not be eligible to borrow a PLUS loan. • NYS is one of 11 states that allow undocumented students to pay in-state tuition at public colleges (must have attended high school within the state for 3 or more years)

Cash Support – Untaxed income (line 44 j. on FAFSA) • Must report on the FAFSA any cash support received. • This includes money from a non-custodial parent that is not part of a legal child support agreement. • Cash support includes money, gifts, and loans, plus housing, food, clothing, car payments or expenses, medical and dental care, college costs, and any money paid to someone else on his behalf.

Dependency

Dependency questions on the 2013-14 FAFSA • Step Three (Student): • If the student answers “NO” to every question in Step Three, then they are considered to be dependent and must complete Parent Information • If the student answer “YES” to any question in Step Three, then they are automatically independent and are not required to complete Parent Information (even if they are living with his/her parent)

2013-14 FAFSA • Were you born before January 1, 1990? • Are you married? • Will you be working on a master’s or doctorate program? • Are you a veteran or currently serving in the US Armed Forces? • Do you have children or other dependents who live with you and you provide more than half of their support?

2013-14 FAFSA (continued) • At any time since age 13, were both parents deceased, were you in foster care, or were you a ward of the court? • Are you an emancipated minor as determined by a state court? • Are you in legal guardianship as determined by a state court? • Did your high school or school district homeless liaison determine that you were an unaccompanied youth who was homeless?

2013-14 FAFSA (continued) • Did the director of an emergency shelter or transitional housing program funded by HUD determine that you were an unaccompanied youth who was homeless? • Did the director of a runaway or homeless youth basic center or transitional living program determine that you were an unaccompanied youth who was homeless or were self-supporting and at risk of being homeless?

FAFSA dependency questions • The financial aid administrator at the college may require the student to provide proof if the student answers “YES” to any question in Step Three

Examples of dependency overrides • Student’s voluntary or involuntary removal from parents’ home due to an abusive situation that threatened the student’s safety and/or health • Incapacity of parents such as incarceration or a disability or mental or physical illness • Inability of the student to locate the parents after making reasonable efforts • Other extenuating circumstances sufficiently documented by a signed letter from a third party

Third party • Counselor or teachers • Clergy • Community groups • Government agencies • Medical personnel • Courts • Prison administrators

A student can not be determined to be independent just because • The parents are unwilling or don’t want to provide the information on the FAFSA • The parents don’t feel it’s their responsibility to provide financial assistance for college or refuse to contribute • The parents do not claim the student as a dependent on their taxes • The student no longer lives at home • Student demonstrates total self-sufficiency

Special Circumstances

FAFSA • Information is as of the date the form is completed – snapshot in time of the family’s resources • But, as we know, sometimes “life” happens. There are changes in a family’s situation. There are changes in a family’s ability to pay for college expenses.

Definition of professional judgment • The sound evaluation of and response to a student’s exceptional circumstances according to the technical and ethical principles of federal student aid. • Decision process to alter standard assessment when unique or exceptional circumstances impact a family’s ability to pay for college

Section 479A of the Higher Education Act of 1965, as amended “Nothing … shall be interpreted as limiting the authority of the financial aid administrator, on the basis of adequate documentation, to make adjustments on a case-by-case basis to the cost of attendance or the values of the data items required to calculate the expected student or parent contribution to allow for treatment of an individual eligible applicant with special circumstances.”

Professional judgment • It’s a subjective process – there is no right or wrong answer • Must be on a case-by-case basis • Must be documented • Approaches and results will be different for each financial aid administrator • Adjustment is only valid at the school making it • Cannot use to waive eligibility requirements or circumvent the law

Examples of special circumstances • Student or parent has recently lost a job • Unusually large medical, dental, or nursing home bills that are not covered by insurance • Elementary or secondary school tuition • Unusually high child or dependent care expenses • Parents enrolled at least half-time • Other changes in a family’s income or assets • Being homeless or a dislocated worker

Needs analysis • Measures ability to pay for college not willingness to pay • PJ cannot adjust for willingness to pay; only ability to pay

Role and responsibilities of the financial aid administrator • Steward of funds, student advocate, systems manager • The financial aid administrator must document and support the reason for the determination and maintain documentation supporting the decision • The financial aid administrator’s decision is final and cannot be appealed to the US Department of Education

Examples of documentation • Medical bills not reimbursed by insurance • Elementary/secondary tuition bills • Child care or dependent care bills • Pay stubs • Unemployment benefit statement • Tax returns

Professional judgment • May not – • Make an adjustment on the initial FAFSA • Change the formula itself or the tables • Change “bottom line” contribution • Cannot make an independent student dependent • No student or parent should be charged a fee for collecting, processing, or delivering such supplemental information

Unreasonable professional judgments • Vacation expenses • Tithing expenses • Standard living expenses such as utilities • Credit card expenses • Standard maintenance items such as lawn care and home repair

Professional judgment • Cannot be based on a “feeling” – it must be based on a reasonable level of data and information • Is not at tool to manipulate the system • Is not a tool to legitimize “negotiation” or to barter • Is not a tool to manage enrollment

Professional judgment – best practices • Make process as simple as possible – many families already dealing with trauma • Open ended questions rather than a checklist • Institutional forms • Committee decision • May be proactive or reactive • Is consistent • Adequate documentation • Like a doctor – examines, evaluates symptoms, diagnosis, treatment plan

Role of the guidance counselor • If you have a student who you believe has special circumstances or should be independent, you should encourage the student to: • Contact the financial aid administrator at the school he or she plans to attend • Gather as much written evidence as possible including a letter from a third party who knows the situation

Sources • NASFAA – “Exercising Professional Judgment” • USA Funds – “Professional Judgment” • Heather McDonnell – “Using Professional Judgment” • www.finaid.org • US Department of Education – • Counselors and Mentors Handbook • Student Financial Aid Handbook • “Use of Professional Judgment to address families impacted by the economy”

Special Circumstances and Financial Aid