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by Chrissy Foran, former financial aid officer at Washington State University

Financial aid can be a very confusing and overwhelming subject for many families. You go through the process with your child, fill out applications, and pore over financial aid award letters, carefully deciphering each one. After months of comparing and discussing and debating, your child makes that all-important decision of where they want to attend. Victory! You feel so proud, mostly for your child, but also for yourself, having survived the process! You think your hard work is done, and you can now relax and enjoy the fruits of your labor. It then dawns on you… wait… do I have to do this every year?!?!?? And then scarier questions arise: Could my child’s financial aid change next year? Might I get less?

The simplest answer is you do need to apply for financial aid each year if you want to renew any need-based aid or borrow federal loans. If your child was offered a merit scholarship from the school, those are typically guaranteed for the four years your child is in school (assuming they maintain the required GPA), but you need to check the school’s policy.

And while colleges generally like to maintain consistency in their aid offers, there are a few reasons that your child’s financial aid award could change from one year to the next.

Satisfactory Academic Progress

One reason for a decrease in financial aid could be if your child fails to maintain Satisfactory Academic Progress (SAP) based on their school’s policy. Each college has their own rules around what GPA and credit load a student needs to maintain to keep their financial aid intact, and dipping below those standards may result in a probationary semester by default or upon appeal. If the student is put on probation and still fails to maintain the required grades, they could lose their eligibility for federal, state, and school-based financial aid (including merit scholarships). It’s important to understand the SAP policy at your child’s college.

Increase in Income

An increase in household income is another major reason why a financial aid award could change in the future. You might receive a substantial raise or a bigger bonus than in the prior year. Maybe you sell some stock or a house, and the profit shows as income on your tax return. Or perhaps a spouse goes back to work after an absence. Anytime your income increases significantly, you can expect a corresponding decrease in financial aid eligibility.

Fewer Children in College

When you have more than one child in college at the same time, your financial aid eligibility increases for each child, acknowledging that your resources must be shared among your enrolled children. If a child graduates, however, leaving you with only one in college, that child’s aid could decrease, as the financial aid process assumes that you can now devote all college resources to that one child. The number of children you have in college currently has a substantial effect on aid eligibility and changes in that number can have dramatic effects on financial aid awards from year to year.

If you’ve been following recent legislative moves, you may know that when Congress passed a COVID relief bill in late December, included were some sizable changes to the FAFSA and the information it will collect, beginning with the 2023-24 academic year. Among the important changes is that the parents’ contribution to the overall federal financial aid calculation will no longer be split among the number of children they have enrolled in college the way their portion of the calculation currently is. So if you have a child that will be in college during this transition of federal policy, their financial aid could be affected. While this change only definitively affects federal aid programs, it remains to be seen how colleges will react to these shifts in the awarding of their own institutional aid, but it is something to keep on your radar.

Once your child is off to college, it might be a good idea to check in every so often with the Financial Aid Office at their school and see what, if any, changes may be on the horizon. They will have the most up to date information on any federal and institutional aid policies and how they could affect your child. And if you are anticipating a change in your family’s financial circumstances, proactively reach out to the Financial Aid Office at your child’s intended school to inquire about effects on future aid before enrolling, so that you can make an informed enrollment decision and are not be surprised by aid changes down the line.

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Written by Chrissy Foran
Chrissy Foran is a member of College Coach’s team of college finance experts. Prior to joining College Coach, she worked as a financial aid officer at Washington State University, Carrington College, and Gonzaga University. Visit our website to learn more about Chrissy Foran.