If you are heading into your sophomore, junior, or senior year, you may have noticed that your financial aid package looks a bit different from last year. That is normal. Financial aid is recalculated each year based on updated information, and several factors can cause your package to shift. Here is what to expect and how to prepare.
What Typically Changes
Federal Loan Limits Increase
The amount you can borrow in Federal Direct Loans increases with each year of school:
- Dependent undergraduate students: $5,500 in year one, $6,500 in year two, and $7,500 in years three and four
- Independent undergraduate students: $9,500 in year one, $10,500 in year two, and $12,500 in years three and four
These higher limits reflect the assumption that students take on more financial responsibility as they progress. If you needed additional funding beyond federal loans last year, this increase might partially reduce that gap.
Scholarships May Not Automatically Renew
Some scholarships are one-time awards. Others renew annually but may have conditions:
- Minimum GPA requirements
- Full-time enrollment status
- Specific major or program enrollment
- Separate renewal applications
Check every scholarship you received last year to confirm whether it renews automatically, requires an application, or has expired.
Your Family’s Financial Situation May Have Changed
The FAFSA uses financial data from a prior tax year. If your family’s income increased, your Expected Family Contribution may have gone up, potentially reducing need-based aid. Conversely, if income decreased, you may qualify for more assistance.
Institutional Aid Adjustments
Colleges sometimes adjust their own institutional grants and scholarships from year to year based on their budget, your academic standing, and changes in enrollment. This is one of the most common reasons returning students see a different package than they expected.
What Usually Stays the Same
- Federal Pell Grants remain available if you still meet income eligibility (maximum $7,395 for 2026-27)
- Federal loan interest rates are set annually but apply to new loans only. Existing loans keep their original rate
- Work-Study eligibility generally continues if you were previously awarded and funding is available
Satisfactory Academic Progress (SAP)
To keep receiving financial aid, you must maintain Satisfactory Academic Progress. Schools define SAP differently, but it typically includes:
- Minimum GPA: Usually 2.0 or higher
- Completion rate: Completing a minimum percentage of attempted credits (often 67%)
- Maximum timeframe: Finishing your degree within 150% of the published program length
If you fall below SAP standards, you may receive a warning, be placed on financial aid probation, or lose eligibility. If this happens, most schools have an appeals process. Contact your financial aid office immediately if you receive a SAP notification.
What to Do If Your Package Decreased
If your aid package is smaller this year, you have several paths forward:
- Appeal your award letter: If your family experienced a financial change (job loss, medical expenses, divorce), you can request a professional judgment review from your financial aid office.
- Search for additional scholarships: Scholarship opportunities are available for returning students, not just incoming freshmen.
- Consider your housing and meal plan: Moving off campus or adjusting your meal plan can reduce your overall Cost of Attendance.
- Explore private student loans: If federal aid and scholarships do not cover your costs, private lenders including credit unions offer loans to fill the gap.
- Look into an education line of credit: An education line of credit allows you to borrow only what you need when you need it, rather than taking a lump sum.
The FAFSA Renewal Process
Remember: you must file a new FAFSA every year to remain eligible for federal and most institutional aid. The FAFSA for the 2026-27 academic year should already be complete. If you have not filed yet, do so immediately. Late filing can result in reduced aid, especially from institutional sources with limited funding pools.
Planning Ahead
Each year of college brings a slightly different financial picture. By reviewing your aid package early, confirming scholarship renewals, and identifying any funding gaps now, you give yourself time to explore options before tuition bills arrive.
Need to compare your funding options? See what options are available from leading credit unions in your area.
