Can anyone tell me whether the Dislocated Worker impact on EFC is “tiered”? And can you confirm that the only impact on EFC of being Dislocated is ignoring assets (I have read that on this forum)?
We had not previously considered completing FASFA as other mock-FAFSA calculators indicated no “need”. However one spouse lost job in December, and meets criteria of Dislocated Worker. However, other spouse has job and earnings will be over $18K or $50K. I have read on this forum that if income is below those levels, then assets can be excluded or EFC can be assumed to be $0.
But is there a graduated formula that says if income was, say $150,000 and is now $75,000 then XX% of assets can be excluded?
Sorry if this is a dumb question or demonstrates my lack of understanding of FAFSA, but I only just realized there might be consideration of job loss, and I don’t have much time to learn about it.
thank you for any insight.
No tiers. Assets are either included or excluded. If the family income is over $50k, being a dislocated worker doesn’t help.
What you can do is file FAFSA answering all the questions as asked about the 2015 income, and then appeal the award from the school through the school FA office by filing the forms they ask for. Loss of job is a reason for reconsideration. Most will ask for the termination letter, any severance or other benefits like vacation pay, unemployment insurance, etc.
thank you so much.
In a reconsideration, how would a FA office evaluate 1) severance pay, and 2) cash and savings?
For example, if you have severance pay, do you think they’d consider that equally to “permanent” pay, meaning a $ is a $, irrespective of its source or purpose. Second, if we have savings (cash/cd’s or investments), my recollection is that the EFC calculation has an assumption or expectation that you would liquidate those savings if you have more than the cost of attendance.
Although its been a while since I’ve looked at it, I have a strong recollection that our EFC according to the mock-FAFSA calculators was greatly in excess of what we felt we could responsibly afford.
Parent assets not in qualified retirement plans are assessed at roughly 6% per year. Student assets are at a higher rate. In the past, we’ve seen parents who had severance (or one time pay jumps due to greatly increased work) treated as ordinary income. This may vary.
The appeal is called “professional judgment.” Ime, it can take some time to get that response. Our school sent offers out with admits in late March, then worked the aid calculations for returning students and sent those out in about June. After that, they looked at PJs. This, too, may vary. Just be warned.
Severance pay is considered income in the year in which it is received.
Your bigger issue is that the spouse didn’t lose his job until December…so his income from the whole of 2015 will be considered on the 2016-2017 FAFSA. What was THAT total income? If that income was above the thresholds for simplified needs $50,000) or auto $0 EFC (not sure of the amount this year), you won’t qualify when you complete your FAFSA. The FAFSA has skip logic that skips,the asset questions IF your income is below the threshold and you are a dislocated worker. For 2015, doesn’t sound like you will meet both tests.
You can contact the colleges and ask for a professional judgement to be considered…but some schools won’t do that yet…because the expectation is that your husband is looking for,mand will get a new job.