Can We Use PJ To Include Income That Was Excluded From Need Analysis By the FAFSA Simplification Act?

According to U.S. Department of Education's (ED's) FAFSA Simplification Questions and Answers, SAI-Q2/A2:

"SAI-Q2: Certain income items have been excluded from the FAFSA form. Can institutions add those items back in by professional judgment?

SAI-A2: Institutions have broad flexibility in exercising professional judgment (PJ). However, institutions may not request additional information or require additional forms beyond the FAFSA form unless the Department or the school selects the student for verification, or the student has requested either a review of their dependency status or special circumstances adjustment."

ED's answer is consistent with statute. Section 479A(b)(2) of the Higher Education Act of 1965 (HEA), as amended [20 USC 1087TT(a)(2)] specifically gives the financial aid administrator (FAA) the authority to make adjustments to the cost of attendance or the values of the data used to calculate the student aid index (SAI) when the FAA believes there are special circumstances that warrant such an adjustment. Schools can use PJ to make adjustments but cannot collect cash support or in-kind support on another application/form for Title IV aid as a matter of standard practice; the student first must be selected for verification or a PJ adjustment.

That having been said, it is NASFAA's understanding that schools should be careful that their PJ decisions are not being made to intentionally circumvent the statute. Adding back income that was explicitly excluded from need analysis under the FAFSA Simplification Act could be viewed as an attempt to circumvent the statute, so the special circumstances must be beyond simply receiving in-kind or cash support.