Monthly Archives: October 2018

Special Circumstances

Special circumstances refers to anything in the applicant’s financial situation that is not reflected on the FAFSA or CSS Profile. The Profile has an actual space for applicants to detail special circumstances. For FAFSA schools, applicants may have to appeal their aid award and go through the Professional Judgment (PJ) process. If this might apply to you, you should understand the decision-making criteria and process so that special circumstances you’re detailing are in fact special circumstances in the financial aid world.

The Higher Education Act and its various reauthorizations list some examples of special circumstances: “elementary or secondary school tuition, medical or dental or nursing home expenses not covered by insurance, unusually high child care costs, being homeless or a dislocated worker, recent unemployment of a family member, or other changes in the family’s income or assets.” However, there is a “judgment” element of PJ: “Use of professional judgment is neither limited to nor required for the situations mentioned.” As the FAFSA transitioned to using prior-prior income data, the Department of Education gave guidance to financial aid administrators to expect more PJ cases.

While there is some judgment involved, there are also a number of requirements for PJ:

  • The reason for the adjustment must be documented, and must apply only to the student and not to a class of students. For example, in the case of a job loss, the family would need to provide documentation such as a termination letter.
  • Adjustments can only be made to either the cost of attendance or values of data inputs into the EFC formula, not to the formula calculation itself. In the case of a family illness, for example, the administrator might reduce assumed income from the ill person or reduce assets based on projected medical expenses.
  • Students may not be deemed independent for aid purposes based on parents’ refusal to provide financial support for education or to complete the FAFSA. However, such students may be eligible to borrow larger amounts under federal loan programs.
  • Calculations may not be adjusted based on recurring vacation, tithing or other standard living expenses.

Financial aid administrators are required not only to document any adjustments they make, but to resolve any conflicting information that they receive. So the onus will be on you to document your situation. And remember that since we’re talking about the FAFSA and Profile, all of this refers to need-based awards, not merit.

FAFSA for Divorced Parents

This is a big topic so for today I’m going to focus on general rules. Keep in mind the FAFSA rules are different from the CSS Profile rules; below is FAFSA only.

The custodial parent for the FAFSA can be different than the custodial parent in the divorce decree and/or different from who claims the student as a dependent on their tax return. The FAFSA defines the custodial parent as “The parent that you lived with most Continue reading FAFSA for Divorced Parents

529s and the FAFSA

529s are a source of a bit of confusion when it comes to filling out the FAFSA. Here are some common issues:

529s for multiple children: All of the parents’ 529s get reported on the FAFSA as parent assets. Let’s say you have 3 children, ages 17 (the one whose FAFSA you’re completing), 15, and 12, and you have a 529 account for each with balances of $12,000, $10,000 and $7,000. You would report $29,000 in 529 assets. Continue reading 529s and the FAFSA