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What’s a dislocated worker on the FAFSA®?


    You may have seen the term “dislocated worker” on the Free Application for Federal Student Aid (FAFSA®). Life events like getting laid off or quitting a job because the military has moved your spouse are considered reasons you might qualify as a dislocated worker on the FAFSA®.

    This status could potentially mean that you’ll qualify for more federal student aid, which is why it’s so important to know what it means and if you, your spouse, or your parent qualifies.

    Here’s what you need to know about what being a dislocated worker means and how it impacts you when you fill out the FAFSA®.

    What does “dislocated worker” mean on the FAFSA®?

    The dislocated worker question on the FAFSA® is used to help calculate your Expected Family Contribution (EFC). Your EFC is calculated based on you and your family’s income and assets and is used to assess how much, if any, financial aid you qualify for.

    If you’re a dependent, your parent’s dislocated worker status could impact your filing. If you’re independent, you or your spouse’s dislocated worker status could affect your filing.

    If you, a parent, or a spouse has lost their income due to a situation beyond their control, read over the FAFSA® qualifications to determine if your situation could qualify you, your spouse, or your parent as a dislocated worker.

    A dislocated worker qualification can potentially lower your EFC and raise the amount of your federal aid award.

    Even if you’re considered a dislocated worker, you may still be asked to report all income — taxed and untaxed. This encompasses a range of support measures including unemployment benefits, relocation assistance, or federal disaster aid.

    Who exactly is considered a dislocated worker?

    Dislocated workers are individuals who’ve lost their jobs due to circumstances beyond their control. It’s important to note that workers who’ve been terminated due to unsatisfactory job performance are generally not considered dislocated workers.

    How to determine if you, your spouse, or your parent is a dislocated worker

    A student, spouse of a student, or student’s parent may qualify as a dislocated worker, according to the U.S. Department of Education, if they:

    • Are currently collecting unemployment benefits as a result of a job layoff or loss and aren’t anticipating returning to their former occupation.
    • Have experienced a layoff, or have received a layoff notification from their job.
    • Are now unemployed after being self-employed because of an economic downturn or a natural disaster.
    • Are unemployed because, as the spouse of an active-duty member of the U.S. armed forces, have relocated because their spouse’s duty station changed, and therefore became unemployed.
    • Are unemployed or underemployed and are also the spouse of an active-duty member of the U.S. armed forces.
    • Are considered a displaced homemaker. A displaced homemaker is defined as a person who’d previously provided unpaid services to their family (for instance, being a stay-at-home parent) and, because of that, is either unemployed or underemployed when they went to resume paid work outside of the home.

    Of note, except for the spouse of an active-duty member of the U.S. armed forces, if a person quits work, generally they’re not considered a dislocated worker.

    Common FAQs about being a dislocated worker and the FAFSA®

    What if I quit my job? Am I considered a dislocated worker?

    If you leave a job voluntarily, you’ll usually not qualify as a dislocated worker, even if you collect unemployment benefits. An exception is if you quit a job to move with a military spouse who’s been relocated; in this instance, you may be considered a dislocated worker.

    What paperwork is required to qualify as a dislocated worker?

    The college you apply to may ask for documentation supporting your dislocated worker status. You might have to prove your status by submitting documentation like unemployment forms, layoff notices, tax returns, a business license, newspaper articles, or military orders. Your school’s financial aid office will contact you if they require documentation and let you know what they’re looking for.

    Regardless, keeping all paperwork associated with a layoff or move handy is a good idea. If you didn’t happen to save any documentation or paperwork evidencing your dislocated worker status, or you can’t obtain documentation on behalf of a spouse or a parent, self-certification, such as a statement signed by the person affirming that they meet the definition of a dislocated worker, is usually sufficient.

    Do you ever qualify as a dislocated worker if you’re self-employed?

    If you’re self-employed and were affected by a natural disaster or the economy, you could be considered a dislocated worker. For example, if your family runs a hotel and a hurricane destroyed it, you may qualify for dislocated worker status. The same goes for a hotel that’s lost substantial business due to an oil spill. Both are disasters out of your family’s control that result in financial hardship.

    Is a dislocated worker the same as a disabled worker?

    Being a dislocated worker isn’t the same as being a disabled worker. According to the Americans with Disabilities Act (ADA), an individual with a disability is defined as a person who has a physical or mental impairment that substantially limits one or more major life activities, has a record or history of this kind of impairment, or is perceived by others as having this kind of impairment. This is very different from being a dislocated worker who’s defined as a person who lost their job for reasons out of their control.

    How does being a dislocated worker impact FAFSA®?

    The FAFSA® includes a question about you, your spouse, and your parents’ dislocated worker status to calculate your EFC. Being a dislocated worker may qualify you for the Simplified Needs Test or an automatic-zero EFC, which could increase how much federal aid you’re eligible for.

    Final thoughts

    If you, your spouse, or a parent has lost their income due to a situation beyond their control, read over the FAFSA® qualifications to determine if your situation allows you, your spouse, or your parent to be considered a dislocated worker.