Publication Date: May 2003
DCL ID: GEN-03-07
Dependency Overrides
Posted on 05-02-2003
May 2003
GEN-03-07
Subject: Dependency
Overrides
SUMMARY: This letter discusses
the conditions that support the use of dependency overrides by financial aid
administrators and reminds schools of the documentation required by the Department
for such dependency overrides.
Dear Colleague:
In the course of conducting
recent compliance reviews of institutions participating in the Federal student
aid programs, we found that some institutions have not been properly following
the statutory requirements for making dependency overrides as well as not adequately
supporting their dependency override decisions with sufficient documentation.
In working to improve compliance at these institutions, we have determined that
issuing comprehensive guidance that reviews the conditions for making dependency
overrides and documenting these overrides would help improve compliance with
these requirements at all schools participating in the Title IV, HEA programs.
Background
Section 480(d) of the Higher
Education Act of 1965, as amended (HEA), defines an independent student as someone
who fits into one or more of six specific categories. Under these categories
a student is independent if he or she -
(1) Is 24 years of age
or older by December 31 of the award year;
(2) Is an orphan or ward of the court or was a ward of the court until the
individual reached the age of 18;
(3) Is a veteran of the Armed Forces of the United States;
(4) Is a graduate or professional student;
(5) Is a married individual; or
(6) Has legal dependents other than a spouse.
In addition, an individual
who does not qualify as an independent student under one of these six categories
may be considered an "independent student" under section 480(d)(7)
of the HEA. Under that provision, a student is considered to be an independent
student if he or she;
. . . is a student for
whom a financial aid administrator makes a documented determination of independence
by reason of other unusual circumstances.
We call such a determination
by a financial aid administrator a "dependency override."
Our application processing
system (CPS) includes procedures that allow schools to process these dependency
overrides on either an initial application (FAFSA or Renewal FAFSA) or through
a correction to a previously submitted application. (Details on that process
may be found in the 2002-2003 Federal Student Aid Handbook in the Application
and Verification Guide, chapter 2, on pages AVG-28 & 29.)
Making Dependency Override
Decisions
The first six categories
of independent students in the statute describe those students for whom it is
not appropriate to expect a parental contribution toward the students' postsecondary
educational costs. The seventh category provides financial aid administrators
with the ability to make a documented determination of independence based upon
"other unusual circumstances."
Since its enactment, the
Department has interpreted the phrase other unusual circumstances in section
480(d)(7) to mean unusual circumstances that make it inappropriate to expect
a parental contribution for the student, and this concept has been reflected
in earlier guidance. Section 480(d)(7) provides the financial aid administrator
with great latitude in determining what constitutes unusual circumstances. We
recognize that, with few exceptions, financial aid administrators have used
this authority under the statute in a prudent and reasonable manner. We applaud
the practice of financial aid professionals in seeking the advice and counsel
of their colleagues on this and other professional judgment cases through the
use of the Internet, and the efforts by associations of financial aid administrators
in developing and conducting training workshops on the reasonable use of this
authority.
These efforts have resulted
in a body of practice within the financial aid profession for making dependency
overrides that focuses on truly exceptional circumstances and consideration
of individual cases, rather than contradicting the fundamental principles of
financial aid need analysis or making de facto changes to the statutory
dependency criteria as they are applied at individual schools. These practices
include, for example, making dependency overrides in situations when a student's
parent cannot be located, or where an otherwise dependent student has been a
victim of domestic violence and is no longer residing with his or her parents.
Pages 28 and 29 of the
Department's 2002-2003
Application and Verification Guide (AVG) emphasize the need to make
dependency overrides only for students with unusual circumstances on a case-by-case
basis and to document the unusual circumstances that the financial aid administrator
relied upon in making the override. In recent years, the AVG has identified
four conditions that, individually or in combination with one another, do not
qualify as "unusual circumstances" or that do not merit a dependency
override. Those circumstances are:
1. Parents refusing to
contribute to the student's education;
2. Parents unwilling to provide information on the application or for verification;
3. Parents not claiming the students as a dependent for income tax purposes;
4. Student demonstrating total self-sufficiency.
The AVG further recognizes
the common practice in the profession mentioned earlier that unusual circumstances
could include an abusive family environment or abandonment by parents.
The law also requires that
a determination of unusual circumstance(s) must be made each award year. A determination
of independence in one award year does not mean that the student would automatically
be an independent student in a subsequent award year. The financial aid administrator
must affirm in the subsequent year that the conditions for determining the student
to be independent continue to exist and continue to make expecting a parental
contribution inappropriate.
Please note also that the
determination by a financial aid administrator at one institution that a student
should be considered independent is also not binding on another institution.
The law requires that the financial aid administrator at the school the student
is currently attending make the determination and that the institution must
have sufficient documentation to support its decision.
Collecting and Maintaining
Acceptable Documentation
Third party written documentation
supporting a student's unusual circumstances is generally required. However,
we understand that there may be some instances where the only documentation
available to the financial aid administrator is a statement by the student.
In these limited cases, the student's statement must include the facts related
to the student's unusual circumstances, and the institution must include any
other pertinent facts in writing.
Financial Aid Administrator's
Written Determination
After reviewing all relevant
documentation related to a student's assertion that there are unusual circumstances
that support why he or she should be considered to be independent rather than
dependent, the financial aid administrator must make a specific determination
for the student. Upon making such a determination that a dependency override
is warranted, the financial aid administrator must prepare a written statement
of that determination, including the identification of the specific unusual
circumstance upon which the financial aid administrator based his or her determination.
The institution must maintain this documentation and the supporting documentation
used to make each determination.
Improving Compliance
We encourage institutions
to take this opportunity to review their dependency override policies and procedures
to ensure consistency with the Department's existing guidance and documentation
requirements that are noted above. We hope that you find this information and
guidance helpful to you when you are considering using this significant responsibility
that has been entrusted to you to meet the needs of students at your institution.
If you have questions on
any of the information contained in this letter, please contact the FSA School
Customer Service Call Center. Staff is available Monday through Friday between
the hours of 9:00 AM and 5:00 PM (Eastern Time) at 1-800-433-7327. After hours
calls will be accepted by an automated voice response system. Callers leaving
their name and phone number will receive a return call the next business day.
You may also FAX an inquiry to the Customer Service Call Center at (202) 275-5532,
or e-mail one to fsa.customer.support@ed.gov.
I look forward to continuing
to work with you in improving access to postsecondary education for all students.
Sincerely,
Jeffrey R. Andrade
Deputy Assistant Secretary for
Policy, Planning, and Innovation
