The College Cost Reduction and Access Act of 2007 (CCRAA) modified the criteria applicants for Title IV aid must meet in order to qualify for either an automatic zero expected family contribution (EFC) or Simplified Needs Test (SNT), which calculates an EFC without considering assets. Please note that an independent student without dependents other than a spouse is not eligible for an automatic zero EFC. In addition to meeting an income criterion, independent students or the parent(s) of a dependent student must also meet one of three additional criteria:

• Eligibility to file a simplified federal tax return;
• Receipt of federal means-tested benefits by a member of the applicant's household within the previous 24 months; or
• Status as a dislocated worker.

The eligibility criterion based on status as a dislocated worker was added by the CCRAA and became effective for the 2009-10 award year.

But who is a dislocated worker? Under the Workforce Investment Act or WIA, an individual is a dislocated worker if he or she falls into one or more of the following categories (also see the 2009-10 Application and Verification Guide, pages 34 to 35):

1. A person who meets all of the following requirements:
   • he was terminated or laid off from employment or received a notice or termination or layoff;
   • he is eligible for or has exhausted his unemployment compensation, or he is not eligible for it because' even though he has been employed long enough to demonstrate attachment to the workforce, he had insufficient earnings or performed services for an employer that weren't covered under a state's unemployment compensation law; and
   • he is unlikely to return to a previous industry or occupation.

2. A person who was terminated or laid off from employment or received a notice of termination or layoff as a result of any permanent closure of, or any substantial layoff at, a plant, facility, or enterprise.

3. A person who is employed at a facility at which the employer made a general announcement that it will close within 180 days.

4. A person who is employed at a facility at which the employer made a general announcement that it will close.

5. A self-employed person (including farmers, ranchers, or fisherman) who is unemployed because of natural disasters or because of general economic conditions in his community.

6. A displaced homemaker, someone who meets all of the following requirements:
   • has been providing unpaid services to family members in the home;
   • has been dependent upon the income of another family member but is no longer supported by that income; and
   • is unemployed or underemployed and is having difficulty obtaining or upgrading employment.

Someone who is receiving unemployment benefits is not necessarily a displaced worker. For example, an individual who is laid off from a law-enforcement position could likely return to the same occupation, disqualifying him from dislocated worker status. On the other hand, a person who was employed at an automobile plant that closed is unlikely to return to the same occupation.

Institutions are not required to verify dislocated worker status. Absent other documentation, self-certification in the form of a statement signed by an applicant that he or she meets the definition of a dislocated worker is sufficient. However, if the school has any conflicting information about the applicant's status as a dislocated worker, it must resolve the conflict before disbursing Title IV aid.

Using professional judgment, a financial aid administrator may also adjust an applicant's response to the dislocated worker question to reflect a change in the independent student's or parent's employment situation after he or she submitted the Free Application for Federal Student Aid (FAFSA). Note that changing the answer to the dislocated worker question from NO to YES will only qualify the applicant for the SNT or automatic zero EFC if the applicant also meets the income criterion. As with all professional judgments, such a decision must be based on the applicant's special circumstances and sufficient documentation of the independent student's or parent's situation. The CCRAA added status as a dislocated worker to list of PJ examples included in Section 479A of the statute.

NASFAA presented a Webinar on professional judgment in June, Professional Judgment: It's Still Your Decision. Individuals still have time to purchase access to the archive of this informative Webinar. For more information, visit the NASFAA Webinar Center.

By Jennifer Martin
NASFAA Assistant Director for Professional Assessment, Training, and Regulatory Assistance

Posted 08/06/09 to www.NASFAA.org. Redistribution to non-NASFAA institutions is prohibited. Please submit Web site questions or comments to Web@NASFAA.org.