Advanced Financial Aid Topics: Special Circumstances, Professional Judgment, & Verification

1. Advanced Financial Aid Topics:Special Circumstances,Professional Judgment, & Verification College Now Greater Cleveland AmeriCorps Guide Financial Aid Training Polaris Career Center February 17, 2012

2. Topics of Discussion • Special Circumstances • Professional Judgment • Verification • Things To Keep In Mind • Questions • Contact Information

3. Special Conditions • Why does it exist? • FAFSA captures “base year” (previous year) information • Ex. In for 2012-13 year, 2011 will be base year • Not looking at current year • Technically FAFSA is one year behind • Enables Financial Aid Administrators (FAAs) to take into account current year occurrences for more accurate financial picture

4. Special Conditions (cont’d) • Definition • Situation where financial picture not adequately reflected on FAFSA due to one or more of following: • Loss of job • Retirement • Separation or divorce • Death of a parent • Medical expenses not covered by insurance • Loss of untaxed income • Requests for dependency overrides

5. Special Conditions (cont’d) • Additional documentation required • Will vary by individual colleges/universities • Professional Judgment (PJ) • Possible outcome of special conditions request • Definition • Discretionary action available to FAAs to address unusual circumstances that affect students ability to pay educational expenses

6. Special Conditions (cont’d) • Generally four types of PJ adjustments: • Cost of attendance • Add allowable expenses that exceed standard COA • Expected Family Contribution (EFC) • Modify FAFSA Data elements which result in different EFC • Dependency status • Dependent -> Independent

7. Special Conditions (cont’d) • Conditions inappropriate to expect parental contribution • Abusive family environment or abandonment by parents • Loan origination and eligibility • Refuse to originate or reduce borrower’s eligibility • Offer unsubsidized loan funds when parents indicate following : • Refuse to complete FAFSA • End financial support to student

8. Verification • History • Began during 1986 – 87 award year • Purpose • Resolve information incorrectly reported on FAFSA • Helps ensure eligible applicants receive correct types and amounts of financial assistance

9. Verification (cont’d) • Selected by either Central Processing System (CPS) or by institution • Some exclusions: • Applicable to entire FAFSA • Student dies during award year • Student not Title IV aid recipient • Student or parent only eligible for unsubsidized financial assistance or aid not based on EFC • Application verified by another school

10. Verification (cont’d) • Applicable to parents’ information • Both parents mentally incapacitated • Resides outside US and cannot be contacted by normal means • Contact information unknown an cannot be obtained by applicant • Applicable to spouse’s information • Spouse deceased • All of the above for parents’

11. Verification (cont’d) • Required items 2012-13 • Household size • Number in college • Child support paid (if reported on FAFSA) • Receipt of food stamps (if reported on FAFSA) • Depending on whether or not federal income tax return filed, additional items will be verified

12. Verification (cont’d) • Acceptable documentation • College/university financial aid offices will provide guidance • Usually specific forms • Tax return transcripts only • Signed copies of tax returns no longer being accepted

13. Verification (cont’d) • IRS Data Retrieval Tool • Available February 5, 2012 • Enables family to have information from tax return electronically transferred to FAFSA • Must meet following requirements in order to use • Valid Social Security # • A FSA Pin • Filed a federal tax return • Not changed marital status since Dec. 31, 2011

14. Things To Keep In Mind • Additional documentation will always be needed • Use of IRS Data Retrieval Tool strongly encouraged • Wait two weeks after filing taxes • Verification process must be completed at all colleges/universities • Financial aid offered often tentative in meantime • FAFSA should be updated if tax filing status is “will file” • Asterisk next to EFC mean selected for verification • PJ decision are final • Cannot not be appealed to US Department of Education

15. Questions & Contact Information Ericka L. Walker-Smith Assistant Director of Financial Aid Baldwin-Wallace College 275 Eastland Road Berea, Ohio 44017 Phone: 440.826.2108 Email: elwalker@bw.edu