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This question is about dislocated worker.
Yes, being a dislocated worker affects FAFSA. The FAFSA application includes a question about you/your parents dislocated worker status as a way to calculate your Expected Family Contribution (EFC). Being a dislocated worker lowers this number, which in turn increases how much federal aid you receive.
You will still need to report both taxed and untaxed income, including unemployment benefits, on your application.

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