Unemployment and EFC

<p>I have been unemployed since Feburary of 2008 and shall exhaust my unemployment benefits this August. I was taking some classes at the community college part-time before being laidoff and enrolled full-time last summer. I shall earn my AS this summer and will attend Rutgers this fall. My funding for schooling has been entirely based on a state program that allows the unemployed to register tuition-free in availible classes the day before they begin. So I avoided having to deal with financial aid, till now.</p>

<p>I am still not entirely sure how I shall pay for the upcoming year as my unemployment earnings puts my EFC way above the Cost of Attendance. There is a new website <a href="http://www.oppertunity.gov%5B/url%5D"&gt;www.oppertunity.gov&lt;/a> that says there will be extra funding for those on unemployment, specifically Pell Grants. </p>

<p>Does anyone know some specifics about this ? Is the EFC calculation going to be adjusted? As the current formula makes its nearly impossible for to get a low enough EFC to get a Pell grant.</p>

<p>Any input would be greatly apreciated.</p>

<p>[url=<a href="http://federalstudentaid.ed.gov/opportunity/index.html%5DOpportunity.gov%5B/url"&gt;http://federalstudentaid.ed.gov/opportunity/index.html]Opportunity.gov[/url&lt;/a&gt;]&lt;/p>

<p>New Educational Opportunities for Unemployed Workers
Americans with more education and training have more secure jobs and higher earnings. With jobs hard to find, it may be a good time to consider going back to school.</p>

<p>The President recently announced that unemployed workers receiving unemployment benefits may qualify for a special hand in paying for education and training. And aid can be significant: In particular, the Federal Pell Grant program can provide up to $5,350 for educational costs at community colleges, colleges and universities, and many trade and technical schools. This is only one example of several federal student aid programs available to assist unemployed workers.</p>

<p>The new bill allows schools to perform an income-based professional judgment and reduce the EFC to zero for those who are unemployed, receiving unemployment benefits and qualify for a specific letter that the Unemployment Commission will begin issuing soon. I am not sure of all of the particulars but I do know that there is no requirement for a school to automatically reduce the EFC to zero, only a strong recommendation by President Obama and the Department of Education.</p>

<p>I would recommend contacting the school and asking them if they will be participating in the program and then contact your Unemployment Commission to see if you qualify for one of those letters.</p>

<p>What financial aid offices are being asked to do is look at each situation in terms of actual earnings now, rather than using the base year (that is, 2008 for 2009-10), for those who have lost their jobs. It does not imply that the EFC will be 0. It does not even really provide much guidance for aid offices, other than a suggestion to make adjustments to income as appropriate (whatever that is determined to be by the school).</p>

<p>If your unemployment benefits are really high, then you can’t realistically expect an adjustment that does not take your earnings into account. Aid officers do not make the EFC any particular number … rather, they adjust elements in the formula. If income is gone, the income from work may be 0 … but the AGI would not be 0, because it would include the unemployment income (that is how it will look when you do your taxes for the year, so that is how the aid officer treats it).</p>

<p>You can file a special circumstances/loss of income request & see what happens.</p>

<p>Here’s an understanding from the “Dear Colleague Letter” issued by the Department of Education [GEN-09-05:</a> Update on Professional Judgment by Financial Aid Administrators](<a href=“http://www.nasfaa.org/publications/2009/eaprofjudg051109.html]GEN-09-05:”>http://www.nasfaa.org/publications/2009/eaprofjudg051109.html). Basically it says that the income for the individual could be counted as zero sincve they no longer earn anything (due to the loss of the job) and that the unemployment benefits could also be counted as zero. While I agree with Kelsmom that it is early in this process and guidance is still lacking, I sincerely do believe that it would allow households with a single wage earner to have their EFC reduced to zero under a professional judgment.</p>

<p>I went to Rutgers and brought a copy of the “dear colleague letter” NikkiiL linked to and the woman answering questions said that they were participating with this effort and my EFC should be zero. Now, I wasn’t entirely convinced that she was completely versed on this matter as I had to point out the relevant parts of the letter, and I fear upon submitting a circumstances appeal I may get someone there who is unaware of these very recent changes. I also did some more searching for info and came across the below link. </p>

<p><a href=“http://www.ilasfaa.org/docs/conferences/2009/presentations/FederalMethodologyChanges.ppt[/url]”>http://www.ilasfaa.org/docs/conferences/2009/presentations/FederalMethodologyChanges.ppt&lt;/a&gt;&lt;/p&gt;

<p>This is a summation of the current EFC calculation criteria for financial aid administrators to use for the 2009-2010 fiscal year. The part that worries me is the raising of the max income from 20k to 30k to be eligible for a zero efc, my 2008 1040 lists $30,061 as my income…is this based on net income or hopefully it means taxable income or am I just reading too much into this? Being in NJ the tuiton aid grant (TAG) is also based off of EFC so should I contact them to inquire if they shall evaluate based on a lower EFC ?</p>

<p>To avoid any problems I think I’m going to hold off on submitting anything further to the financial aid people to avoid any problems before while the kinks are worked out of this new program. Any input would be greatly appreciated.</p>

<p>The Dear Colleague letter does not say that a school must use 0 for income. It is difficult to justify giving a 0 EFC to someone who made $50,000 in the first 5 months of the year & then lost his job … when the next guy made $36,000 all year & doesn’t get a 0 EFC. Schools will still do what they feel is best for each situation.</p>

<p>I work at a school in an area with one of the country’s highest rates of unemployment. If we made every unemployed student’s efc 0 … and the efc of every family with an unemployed parent 0 … we would be giving about $1.00 SEOG to each student with a 0 efc. Not to mention that our institutional funding would not be able to help in any measurable way, as it would be stretched so thin. We still have to be able to figure out who is the neediest & assist as best we can to maximize awards. Auto-0 based on loss of job does not give us the true picture.</p>

<p>I had a meeting on this exact subject with my compliance officers and they are under the same belief that a school can decide to reduce a person’s EFC to zero IF they were the sole wage-earner for the household. Now, they also cautioned that this type of regulation is very subject to interpretation, so schol decisions on what the regulation means will vary from place to place (as is evident from mine and kelsmom’s information in this posting.) As always, Congress has placed the cart before the house and left Financial Aid Administrators grasping at straws trying to figure things out.</p>

<p>My area has also been hit hard by the current economy with thousands losing their jobs over the last couple of years…and we are a small community. While it may make it difficult to stretch SEOG and institutional funding as far as it needs to go, I don’t know how we could justify not zero’ing out the EFC on a single-wage earners FAFSA when they have lost their job suddenly and without warning. But it would be nice to have some additional guidance from the government.</p>

<p>The operative world that NikkiL used is “can”. I am a dislocated worker. My husband is retired, I am the sole “income provider.” That said we have resources from years and years and years of working…they are depleting as we speak, but most people have some resources by the time they reach our age. I doubt any sane financial advisor would give me an auto 0 EFC and even if they did I can’t believe a public the university would have the resources to grant my son the entire cost of tuition. I just received our S1’s finaid letter, we were previously full pay parents. They added a a large work/study and a Perkins loan this year and subsidized part of the Stafford. I wrote a thank you note. All that aside, you may very well end up getting that determination, but it is my impression like Kelsmom and NikkL that this is still discretionary and to be used when necessary. Do talk to your financial aid folks, about your particular situation, that is what they are there for and if you are talking about aid for this fall, you need to get your ducks in a row sooner rather than later.</p>

<p>It’s a delicate balancing act, trying to be fair. I will do whatever my school’s administration decides I should do … in the meantime, I advise parents to get their information together for review & to hang in there until some decisions are made as to how we will award this year. This is uncharted territory for all of us (aid offices & families).</p>

<p>Do any of these changes effect the ineligibility of an auto zero for Independant students without dependants ?</p>

<p>bump^^^^^^^^^</p>

<p>No. Independent students w/out dependents are not eligible for auto 0.</p>

<p>However, if the income is determined to be 0, then they could have a 0 efc!</p>