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Dependency Issues. Financial Aid 101 Helen Parker, University of Southern Maine October 10, 2008. Agenda. Definition of dependent vs. independent Recent changes to definition of independent student Professional judgment overview Discussion of issues related to dependency status.
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Dependency Issues Financial Aid 101 Helen Parker, University of Southern Maine October 10, 2008
Agenda • Definition of dependent vs. independent • Recent changes to definition of independent student • Professional judgment overview • Discussion of issues related to dependency status
Dependent vs. Independent • Dependent and Independent are terms and terms only • Conditions over which the student has little or no control • Results are to collect or not to collect parental data
Definition - Independent • 24 years of age or older by 12/31 of the award year; • orphan or ward of the court or was a ward of the court until the individual reached the age of 18; • veteran of the Armed Forces of the United States • graduate or professional student;
Definition – Independent, cont. • married individual; • has legal dependents other than a spouse; or • student for whom a financial aid administrator makes a documented determination of independence by reason of other unusual circumstances.
Definition - Dependent • Student who does NOT meet any of the previous criteria to be considered independent • Remember that IRS definition may differ
Recent Changes Definition of Independent student expanded to include: • Any student who is an orphan, is in foster care or is a ward of the court at any time after turning 13 years old • Students in this category will not need to include their adoptive parents’ income, asset or other information for determining federal student financial aid. • Any student who is an emancipated minor or is in legal guardianship as determined by a State court.
Recent Changes, cont. • An unaccompanied youth who is a homeless child or youth, as defined by the McKinney-Vento Homeless Act • An unaccompanied youth who is at risk of homelessness and is also self-supporting. • The college may request documentation for any of these items.
Recent Changes, cont. As of 7/1/2009: • Financial Aid Administrators can offer Unsubsidized Stafford Loans to dependent students whose parents do not support them and refuse to complete a FAFSA • No guidance yet
Professional Judgment Financial aid administrators have the authority, through Section 480(d)(7) of the Higher Education Act, to change a student's status from dependent to independent in cases involving unusual circumstances such as: • an abusive family environment (e.g., sexual, physical, or mental abuse or other forms of domestic violence) • abandonment by parents • incarceration or institutionalization of both parents • parents lacking the physical or mental capacity to raise the child
Professional Judgment, cont. Examples of circumstances that do not merit a dependency override, either alone or in combination include: • Parents refuse to contribute to the student's education; • Parents are unwilling to provide information on the application or for verification; • Parents do not claim the student as a dependent for income tax purposes; • Student demonstrates total self-sufficiency.
Recent Changes – Professional Judgment As of 7/1/2009: • Financial aid administrators can make a determination of independence based on a documented professional judgment determination made by another financial aid administrator at another college for the same FAFSA award year. • No guidance issued to date
Issues • Emancipation • Homeless youth • What role do you play?
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