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Updated guidance extends professional judgement relief for institutions
May 05, 2022
Although the concerns about the pandemic have lessened, the impact has been long-lasting – particularly when it comes to economic issues faced by students and families.
Because of the economic issues, The Department of Education on April 29 issued an update to a Dear Colleague Letter (DCL) originally published last January.
In the update, the Department said, "because many of the difficult economic conditions described in our August 2021 update persist, we are extending the guidance in this letter through the 2022-23 award year. As noted above, this means that we will not negatively view increased use of professional judgment or use it as a selection criterion for program reviews for that year. We have updated the award year dates in this letter accordingly."
Also in the letter, the Department reminded institutions about the September 30 Electronic Announcement, which was updated on October 15, 2021. That announcement explains the effect of the American Rescue Plan (ARP) Act change to the tax treatment of unemployment benefits on student aid eligibility for the 2022-23 year.
The Department reminded schools to refer to that announcement for guidance on how to treat the conversion by the ARP of some unemployment benefits from taxable to untaxable income by excluding the non-taxable portion of those benefits from the applicant's Adjusted Gross Income (AGI) or untaxed income. The Department added, "this treatment does not require the use of professional judgment because we consider it to be a correction of FAFSA® data, and, as with the guidance in this letter, it will result in a change to the EFC calculation that is beneficial to students."