How is need based FA awarded for 4 years? My understanding FA is announced together with admission and it is based primarily on prior prior year of parents finances.
Is FA completely re-evaluated every year? How likely will it change? What happens if parents’ income fluctuates substantially from year to year?
Eligibility for need-based government benefits is reevaluated every year. Eligibility for institutional need-based aid may or may not be reevaluated every year, depending on each school’s policies (most schools that provide institutional need-based aid do require new FA forms every year).
It generally depends on what happens with the family’s financial situation.
Then it’s likely that the any need-based aid will be modified.
Your financial aid is primarily based on your parent’s income from a prior year and current (day you submit the FAFSA) assets. I say primarily, because severe changes in circumstances can allow exceptions. Like death, job loss, illness, for example.
Each year, you do have to complete FAFSA in order to get your new awards. At some schools that use CSSPROFILE in addition, there may be other questions to be answered as well. Your award each year should be very similar to your first year financial aid IF your family financial situation is similar.
If your mother decided to go back to work, your parents got a windfall in income or assets, your sibling started or left college—all of these things can change your financial aid.
Also, most schools expect YOU, the student, to take an increasing responsibility in taking on some of the cost of your college. There is an expectation that you are working summers and/or taking on some part time work during the school year. Your Direct Loan limits are increased a bit. So, it’s likely your Student Contribution expectation will go up somewhat.
The costs of college are likely to go up too though some of it might be covered by increases in aid, some of it also might go into your expected contribution. Upperclassmen housing often is more than freshmen housing on campus has been my observation. But at many schools, students can “beat” the averages by living off campus and taking care of their own meals.
But in short, if your parents’ income fluctuates, so will your award.
Others have answered.
Yes. For need based aid, you will submit financial aid application forms annually, and your aid will be based on what you submit for that academic year.
Not easy to answer. This will depend on how much your parent and your income and assets change. There are a teeny number of schools that keep your aid as it is your freshman year…but the number is very small. I believe Northeastern has this…but you would need to check.
That would depend on how MUCH it fluctuates.
Coming from a family that has had plenty of need, and gotten a significant portion of need based aid, I understand this question and asked it a lot as my pups were going through the process of picking their schools. Some things are easy to predict - like how older siblings graduating changes the family size, which generally changes the amount of need and lessens the aid provided. Other things - like having a grandparent pass away, and getting a relatively small inheritance, which changes the available assets, and also lowers the aid - are not so easy to predict.
We looked at most of the schools that meet full need, and even though they all determine need differently using their own formula, they all pretty much told us that they will recalculate aid every year according to the family’s situation at the time of the application. That being said, in order to get an idea as to how their aid might change if your situation changes, they suggested running the NPC with different scenarios - as a family of 5 and again as a family of 4, to see how much the aid changes when the sibling graduates. Or, try playing with the numbers to see what happens if you increased the family income by $X amount, or the family limited assets change, etc. See what happens if a potential inheritance comes in, and if it is given to the grandchild, or to the parents instead.
These schools understand that families who expect to have a lot of need, all want to figure out how to maximize their aid and decrease their net cost over the course of their undergrad years. Schools can’t and don’t give financial advice, but they are more than happy to answer a family’s questions.
Every family’s financial situation is unique. But for families with need, sometimes the choices they make, and when, will impact how much aid their children may expect. Simple things that families might not think about - like what type of assets they have, and when they are liquidated to pay for school - can affect the aid materially in future years. And what impacts the aid at one school may not have as much impact at another school.