Colleges can make it easier for students to avoid crushing loan debt

Students can appeal their financial aid packages, and schools should make the process more transparent and accessible.

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The cap of a University of Iowa graduates candidate is decorated with writing reading “Cancel student debt” during a commencement ceremony for the College of Liberal Arts and Sciences, Saturday, May 14, 2022

College graduates at a recent graduation ceremony.

AP Photos

I still remember seeing the letter of my financial aid offer more than 20 years ago for my incoming freshman year of college. The dollar amount that was my family contribution stunned me. I had no idea how my mother — a single parent and cafeteria school worker — would be able to afford paying anything for my college education.

I wrote the university a letter explaining my family’s circumstances and received an updated financial aid award package a few weeks later that listed my family contribution as zero.

What I did not know was that I had successfully appealed my financial aid package. 

Millions of students across the country are similarly unaware, as I was, of how to appeal financial aid decisions and why understanding the process will save themselves and their families from crippling debt.

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Awareness is a start, but making appeals transparent and accessible through workshops and resources at high schools and universities is urgent.

Buried under a debt mountain

Student debt in the United States has now surpassed $1.7 trillion. The average amount of household student loan debt currently is upwards of $25,000, according to Federal Reserve data from 2020 and 2021. Other reports show the average amount of student loan debt even higher, at nearly $39,000.

And yet, less than a quarter of the more than 1,000 students in a survey by and Quatromoney had appealed their financial aid package, potentially avoiding massive debt.

This needs to change. With the right information, students can plan better for their futures.

President Joe Biden’s administration has canceled debt for students who attended now-defunct for-profit colleges and has made inroads with canceling debt through the Public Service Loan Forgiveness program. Biden has also extended the pandemic pause on federal student loan debt repayment until Sept. 1, and has alluded to additional actions.

But the student debt crisis remains a systemic problem that has been compounded by the recent recession and pandemic. 

It’s also a crisis that disproportionately impacts students of color and first-generation students. While 73.2% of white students with private loans borrow $4,000 or more, 69.4% of Hispanic students and 68.8% of Black students using private loans borrow 10 times more. Asian students are the most likely to use private loans overall. And a Pew Research Center 2019  analysis found that two-thirds of first-generation college graduates incurred debt for their own education, compared to 56% of those with at least one college-educated parent.

Raising awareness

After the pandemic hit, some universities began to advertise that a student could appeal an aid packages. Now, the number of such appeals has gone up. A survey by the National Association of Student Financial Aid Administrators noted that more than 59% of respondents saw an increase in professional judgment requests in 2020 compared to 2019.

Even so, not every institution informs students they can appeal their financial aid award and adjust the amount of student loan debt they take on.

One way to raise awareness is to offer tools on the financial aid appeal processes for high school guidance counselors. Yet the Department of Education’s most recent handbook for counselors on federal student aid makes no mention of the “appeal process.”

Workshops for parents on the college and financial aid process may already exist in schools and community centers, and if those workshops don’t already provide information on aid appeals, they should, in English and other languages. Sites like SwiftStudent can provide resources in more than one language.

Colleges and universities also need to share information for a student to appeal their award package. This can be a statement within financial aid award packages sent to students, with a description of the appeals process and timeline.

These are necessary steps that could help slow down the student loan debt crisis.

I was one of those who benefited greatly from a financial aid package appeal. Millions more aspiring colleges students need similar relief.

Aracely Muñoz is the director for corporate partnerships at Children’s Medical Center Foundation and a board member for the nonprofit Educational Opportunities. She is a Public Voices Fellow with The OpEd Project

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