What is a “dislocated worker” on the FAFSA®?

If you or your parent have lost their job through no fault of their own, they may qualify as a dislocated worker.

Things like being laid-off or quitting a job when the military moves your spouse are both legitimate reasons you or your parent might qualify as a dislocated worker.

What if I quit my job?

If you left your position voluntarily, you will not qualify as a displaced worker. Even if you are collecting unemployment benefits.

If, on the other hand, you quit a job to move with a military spouse, you will still qualify as a dislocated worker.

What paperwork is required?

The college you apply to may ask for documentation supporting a dislocated worker status. You can prove your status by submitting unemployment forms, layoff notices, or military orders. Your school’s financial aid office will contact you if they require documentation and let you know what they are looking for.

Either way, it is a good idea to keep all paperwork associated with a lay-off or move.

What about self-employment?

If you are self-employed and were affected by a natural disaster, you will qualify as a dislocated worker. The reasoning here is because buildings or resources you need to work were destroyed by the natural disaster you survived, or the area you work in had a reduction in economic standing due to that natural disaster.

For example, if your family runs a hotel and it was destroyed by a hurricane, you would qualify for the dislocated worker status. The same goes for a hotel that had lost a substantial amount of business due to an oil spill. Both are disasters out of your control that put a severe financial hardship on your family.

How does a “dislocated worker” status affect my FAFSA®?

The dislocated worker question is used to help calculate your Expected Family Contribution (EFC). This figure is calculated based on your family’s income and assets. A dislocated worker qualification can lower your EFC and raise the amount of your federal aid award.

You must still report all income, taxed and untaxed. This means any unemployment benefits, relocation assistance, or federal disaster aid must all be reported on your FAFSA® application.

If you or a parent has lost their income due to a situation beyond their control, read over the FAFSA® qualifications to determine if your situation applies. If you still have questions, Frank is here to help. Check out our help center or try our chat feature to get help fast.