According to the United States Department of Labor, the national unemployment rate was 8.2 percent in May 2012. If you are unemployed when you complete your Free Application for Student Aid, you may be considered a dislocated worker for FAFSA purposes. This status may affect which financial aid options are available to you and the total amount of aid you can get.
FAFSA has several definitions for a "dislocated worker." If you are currently receiving unemployment benefits, you may qualify. You're considered a dislocated worker the moment you get notice you're getting laid off. It also applies if economic conditions forced you to be unemployed, such as if you had previously been self-employed but you're no longer receiving income. If you were a stay-at-home parent, and you're now separated or divorced, you may qualify if your ex is not supporting you. In some cases, the status of your parents or spouse can also affect your FAFSA eligibility.
Sometimes, you can receive unemployment benefits even if you voluntarily quit your job. It won't help you on the FAFSA since you won't meet the definition of a dislocated worker.
Expected Family Contribution
A dislocated worker status could have a negative impact on the Expected Family Contribution computation. The federal government uses various factors to compute the contribution. It considers every benefit the family gets, including taxed and untaxed income, the number of people in the household, and how many of them are enrolled in college. Schools use this number to determine financial aid eligibility and amounts. Declaring yourself a dislocated worker could reduce this number to zero.
The college you're applying to may request supporting documentation. Keep all correspondence from the Department of Workforce Services to prove you or a relative is getting unemployment benefits. The school's financial aid office can answer any questions you have about the status and its impact on your federal student aid eligibility.
- FAFSA.gov: Are You or Your Spouse a Dislocated Worker?
- FAFSA.gov: Is Parent a Dislocated Worker?
- Daily Finance: FAFSA Season: Getting the Maximum College Financial Aid in 2011
- Studentaid.com: Tips to Help You Maximize Federal Student Aid Eligibility and Awards
- FAFSA.gov: Expected Family Contribution
- United States Department of Labor Bureau of Labor Statistics: Databases, Tables and Calculators by Subject
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