Financial aid admins get green light to help unemployed

Department of Education gives power to use 'professional judgment' in offering further aid to those who have been affected by COVID-19.
By: | February 1, 2021

The U.S. Department of Education, acting on guidance from an executive order signed by President Joe Biden, leaned on financial aid administrators to help further opportunities for individuals who are unemployed or underemployed.

A letter sent to those institution officials has urged them to “exercise professional judgment” when considering those students and families who have been adversely impacted by the COVID-19 pandemic.

“Easing the economic burden on working people is critical in helping America recover from the ongoing pandemic and its effects,” the department said in a statement. “Under the President’s leadership, we are working to help families who have lost jobs to get financial support to pursue higher education.”

According to the Bureau of Labor Statistics and a report earlier this month from Reuters, the U.S. has lost 9.4 million jobs since the start of the pandemic. In December, there were 140,000 more jobs lost, the first time in several months that there had been a drop in employment.

The hope is that through financial assistance, such as Pell Grants or other loan help, more workers will consider furthering their education while becoming more employable in the future.

Annmarie Weisman, the Senior Director of Policy Development, Analysis and Accreditation Service at the Department of Education, said FAAs can utilize Section 479A of the Higher Education Act on a “case-by-case” basis to determine an individual’s eligibility and make changes.

“At all times, but particularly during this period of economic hardship, you may use documentation of unemployment—including, but not limited to, receipt of unemployment benefits—to reduce or adjust to zero the income earned from work for a student and/or parent as well as make corresponding adjustments to Adjusted Gross Income (AGI),” Weisman wrote.

She said documentation such as unemployment letters or benefits that show need must be provided and that the department would continue to monitor cases for eligibility.

However, Weisman did make clear that FAAs do have the power to exercise additional judgment and that these decisions “will not negatively view increased use of professional judgment or use it as a selection criterion for a program compliance review for the 2021-22 award year.”

Financial aid administrators can continue to fall back on guidance from last April when the Office of Postsecondary Education outlined recommendations for professional judgment and regulatory flexibility, as well as guidance for documentation for non-tax filers on Free Application for Federal Student Aid/Institutional Student Information (FAFSA/SIR).