When applying for financial aid for undergraduate, graduate or professional degree programs, youll likely hear a lot about scholarships touted as being renewable for a year or two at a time.
While scholarships and other forms of non-loan financial aid do have the ability in some cases to renew, student loans generally do not. At least, not in the conventional understanding of the term automatically renew.
Meaning, you will probably not receive the exact amount every year, and it will require at least a cursory update of information to the lender, whether its the federal government or a private lender.
Starting with federal student loans: the aid definitely does not automatically renew every year. It does not simply replenish every year because the amount you receive depends on your familys current financial situation and updated government legislation.
So, a renewal of your FAFSA (Free Application For Student Aid) every year is necessary. An online personal identification number will be sent to returning students each year for online applications, or a student will be required to fill out a paper renewal to make the changes.
Private loans may require a less rigorous change process each year or semester, but there will still be some, for many of the same reasons a federal loan does, minus the federal guidelines.
Financial aid need needs to be evaluated each year or semester to account for a students evolving circumstances, as well as that of the economic and legislative environment, to make sure there is fairness in distribution of the aid.
A students tuition, housing or expenses might go up one year or semester, making it necessary to increase their aid amount. He or she might have become eligible or non-eligible for scholarships, grant programs or work-study situations that might impact the amount of money needed.
Additionally, his or her family finances could alter slightly or dramatically, making adjustments in the FAFSA or private loan calculation necessary.
Academic progress is an important factor in determining a students aid package each year, especially with regard to federal loans. If a student does not maintain a satisfactory grade point average, course load or has some disciplinary actions taken against him or her, aid could be restructured.
Funding and allowances from state, federal and university endowments might change, making the amount of funding from these sources fluctuate and the need to pull money from other private or federal sources necessary.
So, when considering your financial aid needs, remember that they are not automatically renewed each year, although major pieces of information (name, social security number, credit history, tax history) remain on your permanent file and the bulk of your initial information will probably not have to be redone.
Be sure to stay organized and aware of any new or renewal application dates, and submit all your paperwork on time. This will ensure a smooth financial aid transition throughout all the years you are in school, and be as close to an automatic renewal as possible.