- Families often skip the FAFSA after a disappointing first year, but financial eligibility can carry over from one school year to the next.
- Changes in income, assets, family size, or institutional funding priorities can open doors to aid that was not available the previous year.
- One family learned this firsthand when their daughter received no aid as a first-year student, but qualified for support her second year.
For thousands of families, the first year of college comes with a difficult financial surprise: a completed FAFSA that results in little or no aid. This disappointment often leads parents to assume that the answer will not change, so they skip the application in later years.
But financial aid eligibility is recalculated annually, which means your second year can look very different from your first year. Income shifts, a one-time earnings drop on your tax return, changes in family size, or updated formulas can reshape the picture.
Federal aid is not the only factor. Colleges themselves may release institutional funds after the first year, especially when one in three students do not return to campus. Financial aid offices may also reconsider students who may have been on the margins of eligibility in the previous cycle.
This is exactly what happened to the family of Joe Saul Sihi, co-host of the show Benjamin stack. His daughter received no need-based aid as a freshman. But the next year, after filing for Foreign Financial Assistance (FAFSA) again, she was offered a generous aid package. Nothing changed financially for the family, but it did for college.
Their experience mirrors what financial aid officials say every year: Students who skip the FAFSA after the first year often leave money unused.
How financial aid eligibility may change from year to year
Financial aid formulas are based on federal tax data from a specific year, and this data changes with each new FAFSA cycle. If a family has experienced a decrease in income, even if modest, the change can improve eligibility for Pell Grants or institutional aid.
Households that experienced a temporary bump in their earnings during the first year (bonuses, asset sales, contract work) may find that these numbers no longer appear on their next tax return.
Colleges are also facing their own changing circumstances. Some institutions allocate more of their aid budget to continuing students than to first years because returning students are more predictable in planning for retention and enrollment. Once a student has demonstrated that they are academically successful and likely to stay, aid becomes an investment for the school.
Financial aid administrators may also use different packaging strategies for second-year students, especially when they are trying to reduce attrition or support students in fields with higher lab or tuition fees.
Families rarely see these internal adjustments, but they benefit from them. Even if the FAFSA score is not significantly different, a college can choose to award its own funds in a new way.
What does this mean for families?
Skipping the FAFSA removes any opportunity to access federal aid, institutional grants, work-study, or certain state financial aid programs. Even for high-income families, the model can unlock funds that are not need-based, including merit programs that require a completed application for institutional tracking.
Submitting the form each year also creates a record that allows the financial aid office to intervene if circumstances change mid-year. Students whose parents face job loss, medical expenses, or reduced hours can request an appeal, but only if the FAFSA is on file.
For families whose finances appear stable, aid in the second year can take unexpected forms. Some colleges award retention grants or departmental scholarships that automatically take into account FAFSA data. Others identify students who narrowly missed first-year eligibility and offer support once more budget becomes available.
Jo Sol Sehee’s family never expected any help after their daughter’s first year. But filling out the FAFSA unlocks this free money. Without the model, no help could be provided – even though the funds were there.
What to do next
Students heading into their second year should treat the FAFSA as a routine part of their registration. Families can:
- File the FAFSA every yeareven if the previous year did not produce any aid.
- Review changes in incomeincluding one-time events that caused your tax return to be dropped.
- Ask the financial aid office Whether the institution adjusts awards for returning students.
- Track deadlinesespecially for government programs that award funds on a first-come, first-served basis.
- Preparing documents Should circumstances change and seeking professional judgment becomes necessary.
- See the college guide. The College Investor Planning Guide is updated monthly and contains essential reminders like these!
The FAFSA often seems like a one-time hurdle, but it works more like an annual financial checkup. Many families assume their situation is fixed, but aid offices see year-to-year variation in almost every income group.
The second year can open doors that were closed the first time. As Jo Sol-Sehee’s family has learned, the answer to one year’s question is not the answer to forever.
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