Does Your Financial Aid Increase Every Year?

November 12, 2019 · 6 minute read

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Does Your Financial Aid Increase Every Year?

Here’s the short answer: No. Your financial aid may change from year to year, based upon numerous factors, ones both within and outside of your control—but it does not automatically increase each year. In fact, sometimes the amount may decrease.

As an undergraduate, currently what you can borrow annually in federal student loans maxes out between $5,500 and $12,500. As a graduate or professional student, the maximum you can borrow annually through Direct Unsubsidized Loans is $20,500. If you need more, you can apply for Direct PLUS Loans.

As far as private lenders go, each has its own parameters about what you can borrow annually for student loans, along with its own lending requirements and parameters for approval.

Let’s dig a little deeper.

Do You Have to Apply for Financial Aid Every Year?

If you’d like to get funding from federal student loans (and other federal financial aid, like grants and work-study), then you’ll need to fill out the Free Application for Federal Student Aid (FAFSA®) each year. For private student loans, you likely need to fill out an application each year with the lender of your choice, unless the lender offers a multiple-year approval option.

How Do You Fill Out the FAFSA?

Basically, you’ll need to:

•  Provide some personal demographic information.

•  List the schools you’re considering (or, if you’re already in school, which one you attend).

•  Determine your dependency status (if you’re under 24, you’re likely considered a dependent of your parents).

•  Provide your parents’ or guardians’ demographic information (unless the formula provided in the FAFSA process determines that you’re an independent student).

•  Share financial information—yours and, if you’re a dependent student, that of your parents.

•  Sign and submit.

There are a few scenarios where you may be found ineligible. These include (but are not limited to) if you owe a refund on a federal student grant from the past, are in default on federal student loans, or if you have a conviction for possession or sale of illegal drugs that occurred when you were a current recipient of federal student aid. With the last possibility, there is an eligibility worksheet that can guide you through other options.

Does the Government Decide How Much Money You’ll Be Awarded?

How much you’ll receive depends on several factors, including your:

•  Expected Family Contribution (EFC): This formula takes several things into account, including your family’s income (taxed and untaxed), assets, benefits (including unemployment benefits and Social Security), size, and the number of family members who will attend college or vocational school that year.

•  Enrollment status, either full-time or half-time.

•  Attendance costs of your school of choice.

The U.S. Department of Education doesn’t decide how much money you’ll receive in federal student loan funding, though. What they’re doing, through the information collected on your FAFSA, is determine your eligibility for federal student aid.

This information is then forwarded to the schools you’ve listed in your FAFSA. Note that, effective with the 2016-2017 academic year, colleges no longer can see the other schools, if any, that you’ve applied to.

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What Role Does Your School of Choice Play?

Once the Department of Education determines that you’re eligible for federal financial aid, your information is forwarded to the schools you’ve listed on your application.

Then, the financial aid department in each of those schools will calculate what it will cost you to attend. Next, they look at your EFC, subtracting that from your cost of attendance (COA). This allows them to see your total amount of financial need, which shows how much need-based aid you can receive.

To determine how much non-need-based aid you can receive, each school will take your COA and subtract financial aid already awarded to you.

Your school may have scholarships and grants that you may also qualify for.

Can You Keep Your Financial Aid Amount Consistent?

There are no guarantees that you’ll receive the same amount of federal student aid from year to year. You may want to have a Plan B, which can include seeking out scholarships and grants and considering a private student loan to fill in the gaps.

If your parents are willing and eligible, they could look into a Parent PLUS Loan to help pay for your education. Other options include finding out if you qualify for federal work-study or finding a part-time job that can help pay for your expenses.

Writing a Financial Appeal Letter?

If you discover that you’ve been denied financial aid or you’ve received less than what you need, one option is to write an appeal letter. Your school may or may not change its decision, but it may be worthwhile to try, especially if you believe you have other information that they didn’t take into account, or if something significant has changed.

If, for example, one of your parents lost a job recently or someone in the family experienced a medical emergency, then an appeal letter might help. Tips that might help you to write a successful one include:

•  Look for a contact in your school’s financial aid office and address that person directly.

•  Be polite, professional, and respectful.

•  Be clear about what you’re requesting, including how much aid you need and why.

•  Be concise and compelling, keeping in mind that the financial aid office is likely busy.

•  Provide relevant documentation, such as a doctor’s note or eviction notice. Perhaps give them a breakdown of how you’d spend the money you’re requesting.

•  Carefully proofread your letter and ask a trusted friend or family member to do so, as well.

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Paying for College If You Didn’t Receive Federal Financial Aid

If you didn’t receive the federal student aid you anticipated or hoped for, and if an appeal letter isn’t successful (or if you don’t qualify for need-based aid), then other options for paying for college include:

•  Seeking out scholarship and grant funding. You can talk to your school’s financial aid department for leads, and use the U.S. Department of Labor’s free scholarship search tool and this grant resource by the federal government. You may find opportunities that are need based, or merit based—or a combination of both.

•  Your financial aid package may include the opportunity to find a job through the Federal Work-Study program . This program focuses on funding part-time jobs for students that are awarded upon financial need. If you qualify, you typically get paid by the hour by the school, but you may want to apply for a relevant job. Opportunities may be limited, so you’ll want to start looking early.

•  If you don’t qualify for work-study or can’t find a position, you can still job hunt on your own. Your college may have job boards where you can find opportunities for part-time employment, and you can ask professors, counselors, friends, and family for ideas. You can also use online job boards.

•  You can also investigate private student loans offered by private lenders. If you do, then you may want to compare interest rates and terms, as lenders typically offer different programs. If you decide to go this route, you may need a cosigner, and you’ll want to read the terms carefully to understand what you’ll owe, when—and if you have to reapply every year or if you’re covered for your entire education.

Private Student Loans with SoFi

SoFi helps students pay for college with our no-fee private student loans. No fees = no origination fees, no late fees, no insufficient fund fees. No fees, no fuss.

It’s easy to apply, and you can add a cosigner to your application in just minutes. SoFi also offers flexible repayment options to help you find the loan that fits your budget, one that allows you to repay your way.

In the interest of total transparency, we recommend you fully explore your federal options first.

Discover more about your private student loan options at SoFi.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.


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