year, and then there was a big stink made several years ago when the practice of basically forcing the scrubs off the team by not renewing their scholarship came to light. After that, many conferences started mandating that a scholarship be a 4-year contract rather than just year to year.
I don't know that the NCAA itself has ever changed the rules. As far as redshirt seasons, the NCAA only grants them when you actually need to use them. So while an athlete might "redshirt" as a freshman, they don't apply for a 5th year until they are actually going to be entering their 5th year. This saves the NCAA from processing lots of unnecessary paperwork considering lots of athletes don't make it to a 5th year for various reasons.
So if a coach gets to that 5th year and doesn't feel like applying for it would be a benefit to his team, why would that coach apply for it? Just send the kid on his way. This actually happens a lot. We just don't hear about it because these kids were far back on the bench.