On Nov. 4, 2022, FSA published a Federal Register notice [87 FR 66683] announcing changes as authorized by the FAFSA Simplification Act (Act), which was enacted into law as part of the Consolidated Appropriations Act, 2021 and amended by the Consolidated Appropriations Act, 2022.
As described in the June 11, 2021 Electronic Announcement, the Department of Education (Department) is implementing these changes via a phased approach that began with the 2021-22 Award Year, with full implementation planned for the 2024-25 Award Year.
The November 4 Dear Colleague Letter (DCL) describes requirements that ED is implementing for cost of attendance (COA), professional judgment, and independent student statuses for the 2023-24 Award Year. We will break down these DCL section into more digestible information.
Professional Judgements
The FAFSA Simplification Act distinguishes between different categories of professional judgment:
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Special Circumstances refer to the financial situations (loss of a job, etc.) that justify an aid administrator adjusting data elements in the COA or in the EFC calculation.
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Unusual Circumstances refer to the conditions that justify an aid administrator making an adjustment to a student’s dependency status based on a unique situation (e.g., human trafficking, refugee or asylee status, parental abandonment, incarceration), more commonly referred to as a dependency override.
A student may have both a special circumstance and an unusual circumstance. Financial aid administrators may make adjustments that are appropriate to each student’s situation with appropriate documentation. Professional judgment request information must be publicly posted on institution websites make students aware of this option.
The DCL explains what has changed regarding professional judgements, listed below:
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Institutions must consider all requests and may not maintain a policy of denying all professional judgment requests. Therefore, institutions must develop policies and processes for reviewing those requests.
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Institutions must disclose publicly that students may pursue an adjustment based on special or unusual circumstances.
- Institutions may use a dependency override determination made by a financial aid administrator at another institution in the same or a prior award year.
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Institutions may use statutory authority to exercise professional judgment during a disaster, emergency, or economic downturn. During these times, financial aid administrators may:
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Determine that the income earned from work for an applicant is zero, if the applicant can provide paper or electronic documentation of receipt of unemployment benefits or confirmation that an application for unemployment benefits was submitted; and
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Make additional appropriate adjustments to the income earned from work for a student, parent, or spouse, as applicable, based on the totality of the family’s situation, including consideration of unemployment benefits.
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Additionally, new requirements for processing and communicating with students who request an adjustment for unusual circumstances have been put in place for 2023-24 aid applicants and forward:
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Institutions must notify students of the school’s process, requirements, and reasonable timeline to review adjustment requests after their FAFSA form is submitted.
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Institutions must provide students with a final determination of their dependency status and financial aid award as soon as practicable after reviewing all requested documentation.
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Institutions must retain all documentation, including documented interviews, related to the adjustment for at least 3 years after the student’s last term of enrollment.
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Institutions must presume that any student who has obtained an adjustment for unusual circumstances and a final determination of independence to be independent for each subsequent award year at the same institution unless the student informs the institution that their circumstances have changed or the institution has conflicting information about the student’s independence.
What hasn’t changed? Institutions must continue to document determinations on a case-by-case basis, with supporting documentation from the student, regardless of how board events may affect the student population. Institutions may continue to allow previous reasons for professional judgement, such as unemployment, dislocated worker, school tuition expenses. Additionally, a dependency override for unusual circumstances is considered unique from a determination of independence for homeless youth or at-risk homeless youth.
For the 2023-24 Award Year, applicants must still indicate an unusual circumstance and request a determination of independence with their school to allow their FAFSA form to process. Starting with the 2024-25 Award Year, both initial and renewal applicants who indicate they have an unusual circumstance on their FAFSA form will submit their application under a provisional independent status.
Independent Student Statuses
Institutions now have additional guidance on the timing of determinations of independence for certain student populations, including unaccompanied homeless youth or at-risk homeless youth, foster care youth, orphans, wards of the court, and students with unusual circumstances.
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Institutions must review all requests for a determination of independence as quickly as practicable, but no later than 60 days after the student enrolls.
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Renewal applicants with an eligible homeless youth, foster care youth, orphan, ward of the court, emancipated minor, or legal guardianship flag on their 2022-23 FAFSA form will have their answers to these questions carried over and pre-populated into their 2023-24 FAFSA form. Other answers to dependency questions (e.g., age, dependent children, veteran status) continue to carry over to the 2023-24 FAFSA form.
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Renewal applicants must still affirm that their previous answers to the dependency questions are correct and applicable prior to submitting their FAFSA form.
Acceptable Documentation
In general, when determining a student’s special or unusual circumstances, or in verifying homeless or foster youth statuses, institutions must ensure that any supporting documentation they collect is adequate to substantiate the student’s— and, as applicable, the parent’s or spouse’s— circumstances. The Act updates, but does not limit, the types of adequate documentation that a school may request from the student.
- Special Circumstances
- A documented interview between the student and the financial aid administrator.
- Supplementary information, as necessary, about the financial status or personal circumstances of eligible applicants as it relates to the special circumstances.
- Unusual Circumstance
- A documented interview between the student and the financial aid administrator.
- Submission of a court order or official Federal or State documentation that the students’ parents or legal guardian are incarcerated.
- A documented phone call or written statement from an attorney, a guardian ad litem, a court-appointed special advocate (or similar), or a representative of a TRIO or GEAR UP program that confirms the circumstances and the person’s relationship to the student.
- A documented determination of independence made by a financial aid administrator at another institution in the same or a prior award year.
- Utility bills, health insurance, or other documents that demonstrate a separation from parents or legal guardians.
- Acceptable documentation may also include a documented phone call or written statement, which confirms the unusual circumstances with:
- A State, county, or Tribal welfare agency.
- An independent living case worker who supports current and former foster youth with the transition to adulthood.
- A public or private agency, facility, or program servicing the victims of abuse, neglect, assault, or violence.
- Unaccompanied Homeless Youth
- In determining independence due to homelessness, institutions must consider documentation from the following entities, provided through a documented phone call, written statement, or verifiable electronic data match, to be adequate:
- A local educational agency homeless liaison or a designee of the liaison.
- The director of an emergency or transitional shelter, street outreach program, homeless youth drop-in center, or other program serving individuals who are experiencing homelessness, or a designee of the director.
- The director of a Federal TRIO program or a Gaining Early Awareness and Readiness for Undergraduate program (GEAR UP) grant, or a designee of the director.
- A financial aid administrator at another institution who documented the student’s circumstance in the same or a prior award year.
- In the absence of documentation from any of the individuals described above, FAAs must make a case-by-case determination:
- Based upon a written statement from, or a documented interview with, the student that confirms that they are an unaccompanied homeless youth, or unaccompanied, at risk of homelessness, and self-supporting; and
- Made without regard to the reasons that the student is unaccompanied and/or homeless.
- In determining independence due to homelessness, institutions must consider documentation from the following entities, provided through a documented phone call, written statement, or verifiable electronic data match, to be adequate:
- Foster Care Youth
- If an institution requires that a student provide documentation that they were in foster care at age 13 or older, institutions must consider any of the following documentation to be adequate in the absence of conflicting information:
- Submission of a court order or official State documentation that the student received Federal or State support in foster care.
- A documented phone call or a written statement from an attorney, guardian ad litem, or Court Appointed Special Advocate.
- Verification of the student’s eligibility for an education and training voucher under the John H. Chafee Foster Care Program under section 477 of the Social Security Act.
- A documented phone call or written statement from a financial aid administrator who documented the student’s circumstance in the same or a prior award year.
- Institutions must also consider a phone call, written statement, or verifiable electronic data match from one of the following sources to be adequate documentation:
- A State, county, or Tribal agency administering a program under part B or E of title IV of the Social Security Act.
- A State Medicaid agency.
- A public or private foster care placing agency or foster care facility or placement.
- If an institution requires that a student provide documentation that they were in foster care at age 13 or older, institutions must consider any of the following documentation to be adequate in the absence of conflicting information:
All supporting documentation, including documented interviews, used in the financial aid administrator’s final determination must be maintained in the student’s file for a minimum of 3 years after their last term of enrollment.
Questions and Answers
The DCL provided Questions and Answers specific to Professional Judgements and Independent Student Statuses:
- PJ-Q1: Are there specific requirements regarding how an institution must publicize information about the availability of professional judgment opportunities?
- Institutions must disclose publicly that students may request an adjustment based on special or unusual circumstances. Institutions have flexibility to determine how and where to best provide the information. For example, institutions may post information about what they consider a special or unusual circumstance on their website, include such information in mailings to students, or add language to award notifications.
- PJ-Q2: May a school have a policy to adjust data elements used in the EFC calculation but not adjust COA components?
- No, institutions may not have a blanket policy to deny all special circumstance considerations in one area or category. Institutions must have a reasonable approach for reviewing all special circumstance requests on a case-by-case basis. Institutions may put parameters and limits on special circumstance considerations, but those limits may not result in denial of all special circumstance adjustments in one category or area.
- ISS-Q1: What is the process for applicants who indicate an unusual circumstance on the 2023-24 FAFSA form?
- If an applicant affirms for the first time that they are unable to provide parent information due to unusual circumstances, they will see improved help text on the FAFSA form regarding next steps. The text will indicate that the applicant can submit a 2023-24 FAFSA form but will not receive an EFC or aid estimate. The applicant will also be instructed to contact the financial aid office at the school they plan to attend to request an adjustment due to an unusual circumstance. Additional language on the confirmation page advises them that they may be eligible to renew their dependency override during subsequent years if they receive a final determination of independence and their circumstances remain unchanged.Renewal applicants who were previously determined to be independent due to unusual circumstances must still indicate that they are unable to provide parental information; their dependency override does not carry over on the 2023-24 FAFSA form. As already noted, under the Act they are to be presumed independent if they were previously determined to be independent at the same institution, their circumstances have not changed, and the institution does not have conflicting information. For the 2023-24 application cycle, schools may choose to develop a method to proactively identify these students and use a previous determination to manually carry forward their dependency override.
- ISS-Q2: Can schools ask students if their unusual circumstances or homeless situation has changed each year?
- Yes. However, institutions must not maintain a practice that delays or hinders the awarding and/or disbursement of federal student aid for such students and may not require them to submit additional documentation unless there is conflicting information that the institution needs to resolve. Section 479D(d) of the HEA, as amended by the Act, will remove barriers for this vulnerable student population.
- ISS-Q3: The Act requires an institution to make an independence determination “not later than 60 days after the date of the student’s enrollment during the award year for which the student initially submits an application.” Does that mean a school must deny a request for dependency override or determination of independence for another reason if the student makes the request more than 60 days after they enroll?
- No. The timeframe in the law is intended to encourage FAAs to make determinations as quickly as practicable. It is not intended to inhibit FAAs from making such determinations later in an award year. The Department encourages schools to act on a request for a determination of independence within 60 days of the student making such a request. However, institutions may deny such requests if a student does not provide requested documentation within the 60-day timeframe.
- ISS-Q4: What documentation is acceptable if an FAA chooses to accept a dependency override due to unusual circumstances made by an FAA at another institution?
- FAAs may document the discussion from a telephone call, collect a written statement, or use a verifiable electronic data match to determine independence. For the 2023-24 year, there will not be a comment or other indicator on the ISIR. Therefore, institutions who are made aware of a determination of a student’s independence at another institution through other means (e.g., a conversation with the student) should work with the student to obtain documentation from the institution that made the determination to use it as the basis for a determination of independence. Further, FAAs who make a determination of independence at their own institution should be prepared to provide similar documentation to FAAs at other institutions.