Do I Have to Apply for Financial Aid Every Year?
Applying for financial aid is usually an annoying and stressful process. There are a variety of documents and forms you need to fill out and supply, the forms are confusing, and the tiniest mistake could result in a delay in receiving your financial aid award. Once you submit your financial aid application and are done with the process, relief will wash over you, and you’ll suddenly feel a lot less stressed. Successfully submitting these aid application forms can feel like cause for celebration, but unfortunately, it’s not something you just do once and are then done with it forever. Contrary to what students might think, you have to apply for financial aid every year.
It’s pretty common for students and parents to wonder why they have to apply for financial aid for college every year. It’s a reasonable question, especially if your finances are the same year in and year out, and you wind up just supplying the same information in the required paperwork. But from the point of colleges and the federal government, it makes sense to require students and parents to apply for aid every year. The reason is simple: a family’s finances can change a lot from one year to another, and that can impact how much a student or parents are able to contribute to tuition costs. Colleges and even the federal government can see their budgets change from year to year, which can impact the availability of aid funds.
Financial aid documents contain multiple questions that concern income. Standard application forms require the applicants to detail their annual income: this includes what a student’s parents make annually, as well as what a student made, if anything. Unsurprisingly, these numbers usually change year to year: a study from the U.S. Bureau of Labor Statistics suggests that half of workers ages 20 to 24 have been in their current jobs for less than a year. The majority of the people in this age group are likely graduates or not college students, but some of them are in college and when you’re a full-time student and part-time worker, you’ll likely cycle through a few different jobs at different salaries. Filling out yearly financial aid documents can help administrators to spot those changes in your income.
In addition to differences in income, students might also have different needs due to a change in the school they attend. The National Student Clearinghouse Research Center suggests that one-third of all students switch from one institution to another before they finally earn a degree, and each school they attend might come with a different price tag. If a student has to pay substantially more or substantially less after transferring, that will impact his or her financial aid award. Additionally, different schools have different financial aid programs, and if a student transfers, he or she could see different aid packages and awards on an institutional level (some schools might give out lots of grant aid, while others might not, for example).
- Expansions to campus facilities
- Increased faculty costs
- A poorly performing endowment
- Smaller-than-expected alumni donations
Schools update the federal government on their financial standing annually, so the government and Department of Education can allocate federal financial aid funding to each school appropriately.
You do have to fill out a FAFSA each year, but if you filled one out the previous year, you may be eligible to use the FAFSA Renewal Form. A renewal requires a FSA ID, which can help you reapply for aid electronically and also gives you access to your federal financial student aid information and records by serving as your electronic signature.
You should keep your FSA ID safe; don’t share it with anyone as it allows access to all of your federal financial aid records and information. Once you have a FSA ID, you can go to the FAFSA website to fill out a FAFSA Renewal Form which can auto-fill with your personal information from the previous year so you do not have to reenter all the information each time.
The IRS Data Retrieval Tool functions to auto-fill your FAFSA form with information from your federal tax returns after filing. If eligible, you will be asked to authenticate yourself via the IRS and you’ll have the choice whether or not to import the data. This can save you time on the FAFSA reapplication process; however, you must have a valid FSA ID and Social Security number to use it.
The Bottom Line
While filling out financial aid forms each and every year can seem like a hassle, there’s a good reason for it, and ultimately doing it will help you get a financial aid award that best meets your financial profile and needs. Though dealing with paperwork like this is never fun, this is just part of going to school.