Professional Judgment

There has been much controversy and a recent article in the Chronicle of Higher Education regarding the appeal by St. Louis University of a Program Review and Final Determination pertaining to the Title IV Programs conducted by the Office of Student Financial Assistance Programs(SFAP)of the Department of Education(DOE). The main issue of dispute between St. Louis and DOE is the director’s use of professional judgment. Very simply, the Department is alleging, according to the Chronicle, that the director improperly increased the Pell award of 2,200 students with his use of professional judgment. In one instance, it is alleged that a family with an income of $103,647, after use of professional judgment by the director, was awarded a Pell Grant in the amount of $1,990. Again according to the Chronicle, an earlier DOE Inspector General audit had found that during the 1994-95 and 1995-96 award years, St. Louis University had utilized professional judgment to increase the Pell award for 46% of its recipients, while the national average was 4.6%.

In its appeal, St. Louis denied that it had misused professional judgment. The College argued that DOE did not have the authority to regulate the financial aid director’s use of professional judgment, that it had reviewed each student file on a case by case basis and that it had adequately documented its use of professional judgment for each file. Both of these steps are required when professional judgment is utilized.

Attorney’s for both sides relied on the statute governing professional judgment. A review of the statute’s language is helpful in understanding the nature of the dispute.


(a) IN GENERAL – – Nothing in this part shall be interpreted as limiting the authority of the financial aid administrator, on the basis of adequate documentation, to make adjustments on a case-by-case basis to the cost of attendance or the values of the data items required to calculate the expected student or parent contribution (or both) to allow for treatment of an individual eligible applicant with special circumstances. However, this authority shall not be construed to permit aid administrators to deviate from the contributions expected in the absence of special circ umstances. Special circumstances shall be conditions that differentiate an individual student from a class of students rather than conditions that exist across a class of students. Adequate documentation for such adjustments shall substantiate such special circumstances of individual students. In addition, nothing in this title shall be interpreted as limiting the authority of the student financial aid administrator in such cases to request and use supplementary information about the financial status or personal circumstances of eligible applicants in selecting recipients and determining the amount of awards under this title. No student or parent shall be charged a fee for collecting, processing, or delivering such supplementary information.”

Though both DOE and the College assert that the statutory language supports its position, it appears that the issues in the St. Louis case relate to the adequacy of the documentation provided and the large number of students to whom the director applied professional judgment.

Judge Ernest C. Cannellos, an administrative law judge with DOE, found for St. Louis, agreeing with the College that DOE was prohibited from limiting the authority of the financial aid director as that authority related to the use of professional judgment. DOE has appealed Judge Cannellos’s ruling to the Secretary of Education.

Without addressing the merits, this case is of importance to the financial aid administrator, as it is representative of the risks inherent in the profession. Any interpretation of a statute or regulation pertaining to Title IV is subject to a different interpretation by DOE. Though the College may ultimately prevail, as the appeal process is both arduous and lengthy, it will have done so at great expense both in terms of lost staff time due to case preparation and stress and legal fees. A recommended practice, then, is to consult with DOE regional office or national, either directly or anonymously, regarding their interpretation of a statute or regulation before implementing any statutory or regulatory interpretation with far reaching policy and fiscal consequences.