Dependency Issues

1. Dependency Issues Financial Aid 101 Helen Parker, University of Southern Maine October 10, 2008

2. Agenda • Definition of dependent vs. independent • Recent changes to definition of independent student • Professional judgment overview • Discussion of issues related to dependency status

3. 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

4. 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;

5. 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.

6. Definition - Dependent • Student who does NOT meet any of the previous criteria to be considered independent • Remember that IRS definition may differ

7. Recent Changes

8. 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.

9. 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.

10. 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

11. 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

12. 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.

13. 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

14. Issues • Emancipation • Homeless youth • What role do you play?

15. A thank you gift just for you 780-5118

16. Questions?