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Do colleges take into account medical expenses in financial aid calculations?

December 18, 2018

If health problems have caused you (or a dependent) to incur significant medical expenses, then you may be wondering how those expenses affect your eligibility for financial aid.  Schools that utilize the College Board’s College Scholarship Service (CSS) Profile in addition to the Free Application for Federal Student Aid (FAFSA) to determine financial need may consider your medical expenses somewhat differently.  (About 250 schools use the CSS Profile to award state and institutional aid - find out here if yours is on the list.)  If you or a dependent are incurring significant medical expenses, especially on an ongoing basis, then you may want to prioritize schools that treat these expenses the most favorably.


Medical Expenses Under the FAFSA

The FAFSA form does not specifically ask about medical expenses.  However, after submitting the FAFSA, you can request an adjustment to your financial aid package from each school.  Your first step is to submit the FAFSA as you normally would, and then contact schools’ financial aid offices directly.  


Medical Expenses as Unusual Circumstances

Under the FAFSA, abnormally high medical expenses qualify as unusual circumstances, provided that the costs were not covered by insurance and the procedures were medically necessary.  (Pro-tip: Non-necessary medical procedures are not specifically disallowed; however, you are much less likely to receive a favorable Professional Judgment for elective procedures.)  Costs incurred for herbal remedies, vitamins and other over-the-counter medications, and holistic health treatments are generally excluded.  The types of medical expenses that qualify include:

  • After-tax health insurance premiums;

  • Co-pays and deductibles;

  • Prescription medications; and

  • Expenses paid for durable medical equipment such as eyeglasses, crutches, thermometers, blood pressure meters, and glucometers.


Documenting Your Medical Expenses

For all qualifying expenses, you will need to provide sufficient documentation.  You may need to document the medical necessity of a procedure, in the form of a letter from a qualified medical professional.  To the extent possible, you will need to provide copies of medical or dental bills (especially large bills) and letters from doctors.  You should also prepare a detailed summary of your medical expenses, and if you have more than one condition, break out the different expenses associated with each condition.  


Requesting Professional Judgement

Once you clearly understand the qualifying criteria and have gathered the necessary paperwork, it is time to contact schools’ financial aid offices to request a second look.  


Financial aid offices are authorized by Section 479A of the Higher Education Act of 1965 to conduct “Professional Judgement” reviews of students’ and prospective students’ FAFSA applications.  While financial aid administrators cannot modify the U.S. Department of Education formulas by which financial aid needs are calculated, they can assess your specific circumstances and make corresponding adjustments to the data inputs on your FAFSA application.  These adjustments will typically result in a reduced Expected Family Contribution (EFC), enabling you to qualify for more substantial financial aid.  


In addition to the required documentation, the financial aid office may ask you to provide a letter that formally summarizes your medical circumstances.  Many schools also require you to complete a form that can be downloaded from the school’s website. Upon receiving approval, you will be issued a revised package of financial aid.


The Importance of Timing

If you are appealing your financial aid award, start the process early.  Schools often distribute financial aid to eligible students on a first-come-first-served basis, so the possibility exists that your appeal will be approved but the school no longer has sufficient funds to provide you with increased financial assistance.


You will need to appeal to every school that you are seriously considering attending - and you will need to do it for every year that you experience unusual circumstances. You can submit an appeal mid-way through a school year if necessary, although a school may not act on the results until the following year, depending on the nature of the unusual circumstances and the school’s available funding.  If your appeal is denied, then there is no further appeals process.


Medical Expenses Under the CSS Profile

Unlike with the FAFSA, the CSS Profile does include a section on medical expenses.  Qualifying expenses include medical and dental expenses incurred by you or a dependent, and encompass both health insurance premiums and out-of-pocket costs.  If your medical expenses were unusually high, or you are expecting to incur high medical expenses in the relatively near future, then you can document this in the Special Circumstances section of the CSS Profile.  For any special circumstances, you will need to provide evidence in the form of written documentation.


Maximize Your Options

If medical expenses constitute a significant part of your financial profile, then you may want to apply to schools that accept the FAFSA only and schools that accept both the FAFSA and CSS Profile, to maximize your alternatives.  Even if you receive unfavorable results from one school, you may still get what you need from others.  Get organized and get started early! Your future self will be grateful that you did.

what differently.  (About 250 schools use the CSS Profile to award state and institutional aid - find out here if yours is on the list.)  If you or a dependent are incurring significant medical expenses, especially on an ongoing basis, then you may want to prioritize schools that treat these expenses the most favorably.


Medical Expenses Under the FAFSA

The FAFSA form does not specifically ask about medical expenses.  However, after submitting the FAFSA, you can request an adjustment to your financial aid package from each school.  Your first step is to submit the FAFSA as you normally would, and then contact schools’ financial aid offices directly.  


Medical Expenses as Unusual Circumstances

Under the FAFSA, abnormally high medical expenses qualify as unusual circumstances, provided that the costs were not covered by insurance and the procedures were medically necessary.  (Pro-tip: Non-necessary medical procedures are not specifically disallowed; however, you are much less likely to receive a favorable Professional Judgment for elective procedures.)  Costs incurred for herbal remedies, vitamins and other over-the-counter medications, and holistic health treatments are generally excluded.  The types of medical expenses that qualify include:

  • After-tax health insurance premiums;

  • Co-pays and deductibles;

  • Prescription medications; and

  • Expenses paid for durable medical equipment such as eyeglasses, crutches, thermometers, blood pressure meters, and glucometers.


Documenting Your Medical Expenses

For all qualifying expenses, you will need to provide sufficient documentation.  You may need to document the medical necessity of a procedure, in the form of a letter from a qualified medical professional.  To the extent possible, you will need to provide copies of medical or dental bills (especially large bills) and letters from doctors.  You should also prepare a detailed summary of your medical expenses, and if you have more than one condition, break out the different expenses associated with each condition.  


Obtaining a Professional Judgment

Once you clearly understand the qualifying criteria and have gathered the necessary paperwork, it is time to contact schools’ financial aid offices to request a Professional Judgment.  


Financial aid offices are authorized by Section 479A of the Higher Education Act of 1965 to conduct Professional Judgement reviews of students’ and prospective students’ FAFSA applications.  While financial aid administrators cannot modify the U.S. Department of Education formulas by which financial aid needs are calculated, they can assess your specific circumstances and make corresponding adjustments to the data inputs on your FAFSA application.  These adjustments will typically result in a reduced Expected Family Contribution (EFC), enabling you to qualify for more substantial financial aid.  

  • Pro tip: If your EFC is already zero, financial aid administrators can offer more financial aid by raising your cost of attendance.


In addition to the required documentation, the financial aid office may ask you to provide a letter that formally summarizes your medical circumstances.  Many schools also require you to complete a form that can be downloaded from the school’s website. Upon receiving Professional Judgment approval, you will be issued a revised package of financial aid.


The Importance of Timing

If you need to request a Professional Judgment, start the process early.  Schools often distribute financial aid to eligible students on a first-come-first-served basis, so the possibility exists that your Professional Judgment will be approved but the school no longer has sufficient funds to provide you with increased financial assistance.


You will need to request a Professional Judgment from every school that you are seriously considering attending.  In addition, you will need to request a new Professional Judgment for every year that you experience unusual circumstances.  You can request a Professional Judgment mid-way through a school year if necessary, although a school may not act on the results of a Professional Judgment until the following year, depending on the nature of the unusual circumstances and the school’s available funding.  If your Professional Judgment is denied, then there is no appeals process.


Medical Expenses Under the CSS Profile

Unlike with the FAFSA, the CSS Profile does include a section on medical expenses.  Qualifying expenses include medical and dental expenses incurred by you or a dependent, and encompass both health insurance premiums and out-of-pocket costs.  If your medical expenses were unusually high, or you are expecting to incur high medical expenses in the relatively near future, then you can document this in the Special Circumstances section of the CSS Profile.  For any special circumstances, you will need to provide evidence in the form of written documentation.


Maximize Your Options

If medical expenses constitute a significant part of your financial profile, then you may want to apply to schools that accept the FAFSA only and schools that accept both the FAFSA and CSS Profile, to maximize your alternatives.  Even if you receive unfavorable results from one school, you may still get what you need from others.  Get organized and get started early! Your future self will be grateful that you did.