The U.S. Department of Labor has issued guidance to state unemployment agencies and other workforce investment system offices about assisting dislocated workers with financial aid applications and encourages their support of financial aid administrators who need information about dislocated workers.
The College Cost Reduction and Access Act of 2007 specified that parents and independent students identified as dislocated workers are eligible for the simplified needs test or automatic zero EFC, and the 2009-10 FAFSA contains questions about this status. In addition, the CCRAA allows financial aid administrators to make adjustments to cost of attendance or to adjust data elements used to calculate the EFC when a member of the family is identified as a dislocated worker.
Not everyone who receives unemployment benefits will meet the definition of dislocated worker, nor do all dislocated workers receive benefits. The definition of a dislocated worker is codified in the Workforce Investment Act of 1998.
The March 10, 2009 letter from the Department of Labor to state workforce agencies and liaisons explains how the new rules affect federal financial aid applications and asks for staff cooperation in assisting clients of One-Stop Career Centers to complete the FAFSA questions correctly. It encourages collaboration with local financial aid administrators, suggesting that they provide institutions with samples of various types of documentation that prove a student's status.
One-Stop Career Centers are designed to provide a full range of assistance to job seekers under one roof. Established under the Workforce Investment Act, the centers offer training referrals, career counseling, job listings, and similar employment-related services.
Students who are asked for proof of dislocated worker status by their schools must request it directly from the workforce investment system - there is no mechanism for schools to submit direct requests - and the request will be fulfilled by providing the documents either directly to the student or directly to the institution, whichever the workforce office elects.
According to Chapter 2 of the 2009-2010 Application and Verification Guide, released March 25 by the Dept. of Education, schools are not required to verify dislocated worker status. The Guide states, 'If you choose to verify it, documentation can include, as appropriate to the category, a letter or a layoff or termination notice from the employer, unemployment insurance system verification, tax returns, a business license, or newspaper articles. You may also use documents from the state workforce agency or a One-Stop Career Center, though they are not required to provide you such documentation and a person may meet the dislocated worker definition without going to the workforce investment system for services. Absent all other evidence, self-certification will suffice, such as a statement signed by the person affirming that he meets the definition of dislocated worker.'
Financial aid officers who want to establish a relationship with their local workforce investment office can use the One-Stop Career Center Locator to identify the closest offices.
By Darrill Anderson
NASFAA Associate Director of Communications
Posted 03/27/09 to www.NASFAA.org. Redistribution to non-NASFAA institutions is prohibited. Please submit Web site questions or comments to Web@NASFAA.org.
