As more and more services are available through your account, the security of your password becomes more critical. For faculty and staff, someone with your password could modify student grades or alter budgets, or masquerade as you in a variety of different contexts. For students, your password gives access to all of your academic work and records, personal information, and everything else you do online. Clearly, you don't want anyone else to have your password.
Password expiration is one tool among many to minimize the long-term damage that can be caused by an attacker with access to a sensitive password.
If you have opted-in to two factor authentication, your password will be exempt from the annual expiration requirement - it will never expire.