The Free Federal Student Aid Application, commonly known as the FAFSA, is an application provided by the federal government that students can fill out to determine eligibility for grants, loans, and other financial aid to attend college. This money is provided by the federal government and is made available to individuals according to a formula that takes into account the financial resources of an individual. Receiving unemployment benefits can affect a person’s eligibility.
The FAFSA application asks the individual to answer a number of different questions, many of which relate to the individual’s financial resources. In general, the greater the income of an individual, the smaller the amount of subsidies and loans that he is considered eligible for. An individual must fill out the entire application honestly. If the person lies in the application and is found to be lying, he or she may be required to return any money granted to that person.
Adjusted gross income
The applicant’s adjusted gross income, determined by the Internal Revenue Service, includes not only income earned from a job, but also income from other sources, such as unemployment benefits. However, nowhere does the FAFSA application ask the applicant specifically about whether a person received unemployment benefits and if so how much.
The FAFSA asked if the applicant was a dislocated worker. While not all recipients of unemployment benefits are considered scattered workers, many of them are. If a person is laid off from work through no fault of their own, such as due to a structural change in the company, then he or she is considered a replaced worker. According to the rules of the FAFSA, this status qualifies him for receiving additional grants and loans.
Some FAFSA grant or loan recipients wonder if receiving this amount will affect their eligibility for unemployment benefits. It does not, since unemployment agencies do not count school benefits as income, since they can only be used to pay for schooling. However, one of the requirements of receiving unemployment is that the person must be ready to work. If a person is attending school full-time, the agency may consider him out of work and deny him his benefits.