SEED is committed to helping each graduate and their family understand the college financing process and to carefully evaluate the total cost of college before committing to a school. Because of the emphasis on college affordability in the college selection process, our students and their families can make informed choices about a schools’ financial aid packages, which can help them avoid the pitfalls of high student loan debt faced by many of their peers after graduation.
As the cost of college continues to rise in the United States, so does the problem of student loan debt. According to Pew Research, one-third of US adults aged 18-29 (and one-fifth of those 30-44) have student loan debt. Overall, Americans have 1.5 trillion dollars in outstanding student loans, and the burden falls disproportionately on Black and brown students and on low-income students.
At SEED, planning for the cost of college starts in high school. Students learn about the different types of aid available and how to access them during college transition seminars. College success advisors work with students and families to navigate the complex systems of financial aid. “The key thing we’re constantly working on with students and families is the college financial process. Students attend financial aid nights, learn about scholarships, and complete the FAFSA, which is the launching pad for federal student aid. FAFSA completion is central to securing college financing, and it can be a daunting form to complete, particularly if you’re seeing it for the first time,” says Vincena Allen, The SEED Foundation’s chief growth officer.
SEED students and families develop a strong understanding of college financing. This is critically important because students applying to colleges are asked to make financial decisions that will impact their lives for decades. This is particularly true because the impact of student loan debt is widespread—but not equally distributed. Black students are more likely to take out loans to finance their education than white students, to graduate with an average of $7,400 more debt, and to receive a wage of 19-30 percent lower than white earners when entering the workforce.
Student loan debt can have far-reaching effects, influencing major life decisions. With compounding interest, the total amount of student debt can increase while borrowers are paying it off. Those with high rates of debt may not be able to afford to work in lower-paying careers such as teaching or public service or to take on the risk of entrepreneurship. And according to educationdata.org, 37 percent of Hispanic borrowers delayed having children because of student loan debt, while 46 percent of Black borrowers put off buying a home because of debt.
A college degree is only a tool of economic mobility if it is both useful and affordable. At SEED, we work with students and families so that they understand the importance of applying to multiple “right-fit” colleges—schools with a proven track record of awarding robust financial aid packages and supporting low-income, first-generation college students. Once the college acceptance letters start rolling in, we support SEED seniors as they weigh the merits of each school and make informed decisions. In addition to factors like majors, location, campus, school culture, and extracurriculars, students must evaluate financial aid packages and how each offer will impact them in the near and long term.
“With our seniors, our goal is to help them to understand their financial aid awards. In college transition class, we conduct exercises and financial aid comparisons so that students understand all the different types of aid that are given,” says Ms. Allen. Advisors sit down and go through all the details with students, doing the math together to figure out the gap between their financial aid award and the full cost of college. By the time they commit to a school, students have a strong grasp on their financial plans and obligations.
Staying on Pace in College
One of the primary barriers to college completion for low-income, first-generation students is financial challenges. Surprise out-of-pocket costs such as added living expenses, a new laptop, or lab fees can upend a carefully calibrated budget. External scholarship money or other funding can be delayed. An unresolved balance can shut students out of registering for courses. These types of unexpected pitfalls are one of the many areas SEED graduates can count on their SEED college success advisors to help them navigate.
One of the first things college success advisors do when they visit students on their college campus is to go to the financial aid office together. Advisors guide students as they figure out what they need to ask for and coach them on how best to advocate for themselves. Examples include asking to have a hold removed so they can start classes, setting up a payment plan for outstanding costs, or resolving one of many other challenges that might arise.
“Advisors serve as strategic managers—they help students work through the issues, but the student has to go in and do all the talking,” says Ms. Allen, stressing that dealing with finances is a learned skill. “People aren’t always comfortable talking about money—no matter their socioeconomic status. We help students find their voice and get over that fear and learn there are ways to negotiate and push through.” By learning to advocate for themselves in the financial aid office just like they do in the classroom, students can solve problems that could deter them from their path to college and career success.
Paying for college should not be as hard as it is, but SEED students have the support all students with college aspirations deserve, regardless of race or socio-economic status. Avoiding significant student loan debt through informed financial decision-making and maximizing the use of aid and scholarships available is critical to laying a foundation for economic freedom in adulthood.