The number of student appeals for more financial aid money has risen dramatically this year, underscoring the effects of the lagging economy on college affordability.

Financial aid awards are based on the previous year’s income, but students may appeal for more money if their family undergoes financial hardship like a parental job loss. As the unemployment rate has spiked — reaching 7.4 percent in Maryland in July — so too has the number of appeals.

The Office of Student Financial Aid has recorded about 1,400 appeals this academic year, compared to about 1,000 for the previous academic year. The office typically sees about 300 to 350 appeals per academic year, Financial Aid Director Sarah Bauder said in an e-mail.

“The increase in appeals is directly related to the downturn in the economy,” Bauder said. “Families have fewer resources to access, such as home equity, 401(k)s or retirement plans, credit or other family members contributing.”

Unemployment in the state between June 2008 and June 2009 flew upwards — from 4.4 percent unemployment to 7.5 percent. Nationally, appeals are on pace to exceed the almost 144,000 filed for the 2008-2009 academic year and the more than 112,000 filed in 2007-2008, while the number of financial aid applications at this university has risen 12 percent — mostly among higher income families looking for loans, Bauder said.

But with budget cuts and furloughs on the minds of many university administrators, university officials realize granting more student aid this year is going to be even more difficult than in the past.

Exacerbating the problem is the university’s struggling endowment, which helps, in part, to fund student scholarships.

The university’s endowment fund has lost a significant portion of its value in the recession, according to the university’s website. And only about 30 percent of the $450 million endowment is designated for student scholarships.

Some of that 30 percent is apportioned for very specific purposes — such as creating a scholarship for music majors — and cannot be used for emergency financial aid, Vice President of University Relations Brodie Remington said.

Because the endowment is a permanent investment, the university can only spend the earnings it generates, he added.

Last March, the university created the Keep Me Maryland program to raise emergency aid money for students.

“Keep Me Maryland is particularly urgent and important because of the economic circumstances,” Remington said.

Aimed at alumni and past donors, the initiative is designed to close the gap between available aid and the rising need of students and their families.

Since its creation, Remington said, the program has raised about $260,000, mainly through small donations rather than large gifts.

The Keep Me Maryland ad campaign features university students expressing concerns over their ability to pay for and return to college. This, Remington said, seemed to resonate especially with recent university graduates who then donated smaller, more affordable amounts of money to the cause, as opposed to the larger sums of money usually received in donations.

“It’s led to a very gratifying increase in the number of contributions, generally small, but enough to make a difference,” Remington said.

Still, more money is needed.

“We’re just going to try to keep doing more, keep doing better, and allow the office of financial aid to be responsive to as many students in need as possible,” Remington said.

Through a combination of good planning and varied revenue sources Bauder said her office is able to meet the demand — at least for now.

“We started planning for [the increase in appeals] two years ago,” Bauder said.

But that could change if the recession persists.

As in a typical year, the office has granted about 60 percent of appeals, she said, adding many students who appeal want more loan money, not necessarily grants.

But loans have to be repaid and grants, such as the federally backed Pell Grant program — given to low-income families to help with higher education costs — are limited.

There are tricks to the trade of appeals, however. Those who appeal earlier in the year are more likely to get their requests granted, aid officials have said, and upperclassmen tend to be favored over incoming freshmen.

cox at umdbk dot com