The ceremonial tossing of college-graduation caps into the air was once a symbol of liberation. Now, it often signifies a future tethered to massive student debt, which takes a borrower 14 years on average to repay. Most recent graduates struggle to escape its wrath; after all, student debt in the United States now amounts to $1.16 trillion, $31 billion more than it was last year. America’s own president didn't manage to pay off his loans until a few years before he took office.

The Internet has, naturally, become a reservoir of information on the topic. A Google search for "college loan debt" yields roughly 21 million results. In that haystack, resources range from loan-repayment calculators that give students a timeframe for repayment to "how to" listicles extolling financial advice. Personal narratives of miserly post-college living are nestled in the self-help results, too. Indeed, studies show that student debt can even take a toll on one’s physical and mental health.

So, why did prospective college students, according to new estimates, turn down nearly $3 billion in free federal-aid money last year? The answer appears to be two-fold: the red tape of the financial-aid process and the widespread financial illiteracy plaguing the nation.

Unclaimed Federal Aid Money by State, 2013-2014

Move your cursor over each state to see the totals in millions left behind by 2013 high school graduates.(NerdWallet)

The $3 billion figure is according to the online financial resource NerdWallet. Its researchers took the number of graduating high-school seniors who, during the 2013-14 application cycle, failed to fill out the FAFSA (the Free Application for Federal Student Aid), and multiplied figure that by the average amount of need-based Pell Grant money that was disbursed among the year’s grant recipients.

It’s worth noting there are caveats to NerdWallet's findings: For one, the study dealt with high-school graduates who hadn't yet enrolled in college and only accounted for potential—rather than actual—aid money. And many American families aren't eligible for the aid. Still, what the report reveals is, perhaps, shocking: Less than half of high-school graduates last year actually filled out the FAFSA.

The FAFSA is the first step toward receiving Pell grants. As its name implies, the application is free—and, for the low-income students who are deemed eligible, the money it generates is free, too. Unlike loans, students don't have to pay off the aid. With the maximum Pell Grant amount valued at $5,775 per student for the 2015-16 year, the FAFSA alone doesn't always make a huge dent in tuition for students, especially those attending expensive private colleges. But for many it could cover the majority of the tuition at many public two- and even four-year colleges.

The amount of paperwork required complete the application could explain why so few people complete it. Filling out the lengthy form is a laborious process—and the Department of Education doesn’t try to hide that. In fact, the FAFSA "FAQ" page prominently displays the time requirements for each portion:

  • 55 minutes to complete and submit an initial application
  • 45 minutes to complete and submit a renewal application
  • 10 minutes to make FAFSA corrections

But those could be extremely conservative estimates, according to one 2007 study, which calculated the form takes as many as 10 hours to fill out—roughly five times the amount indicated by the feds. The study’s analysis factored in the time it would take to source the relevant financial documents, verify the information, fill out the forms, and revise for errors. In many cases, completing the FAFSA is more tedious than filing taxes.

Last year, the Obama administration announced the launch of the so-called "FAFSA Completion Initiative," a program designed to bolster completion rates. In fact, the White House is currently hosting a competition—the aptly titled "FAFSA Completion Commencement Video Challenge"—to continue that endeavor. Aspiring college students can send in videos showcasing the creative approaches their schools are taking to ensure more students fill out the application.

Yes, the application for the government’s financial-aid program is so tedious that the very same government has to incentivize students to collect free money.

For good reason, the FAFSA has been a subject of intense political debate. Republican Sen. Lamar Alexander of Tennessee has been particularly vocal in his criticism of what he calls the "dreaded" FAFSA. Last month, while speaking to the Senate, he whipped out the 10-page, 108-question document. As the Senator spoke the document unrolled onto the floor like an ancient scroll: "This is the form that 20 million Americans fill out," he stated, after which he bandied the papers around for the duration of his speech as if they were a prop. "The problem with this is that it’s generally unnecessary."

Alexander has proposed a bill that he hopes would make the process far simpler: the Financial Aid Simplification and Transparency Act of 2015. (He's also set on making the application the size of a postcard.) "It will turn these [108] questions into two: One about amount of family income. And one about size of family," Alexander said.

But the application’s length isn't the only issue. Gianna Sen-Gupta, the higher-education analyst at NerdWallet who worked on the study, suggested that a lack of familiarity with how the aid works is the biggest obstacle to getting the free money. "I would say the biggest reason students aren’t filling it out is that they think they would be ineligible for any kind of aid, so they don’t bother," she said. According to Sen-Gupta, many students don’t even realize what the FAFSA is. "Students think that they don’t want to take on any debt—they don't realize that all financial aid isn’t student loans."

But apart from the time commitment, there isn’t much of a reason to skip out on the FAFSA. Sure, some families may be uncomfortable with sharing certain financial data with the government, but a lot of they have to disclose a lot of that information every tax season anyway. The FAFSA isn’t a contract; there are zero obligations involved. "Once they fill out the FAFSA they don’t have to accept all the loans that they are eligible for. They can just not accept the terms," Sen-Gupta said. "It’s really just increasing your options—not really setting anything in stone."

Inexperience seems to be a major reason aspiring college-goers are holding off. At 17 or 18 years old, figuring out how to pay for college is often the first large-scale financial decision a person has to make. "It can be pretty scary for them, and they may not know who to turn to," Sen-Gupta said. "It’s really a matter for the people in the community: Their parents, their mentors, and their teachers shedding light on financial aid for college and preparing them."

Indeed, abysmal financial-literacy rates nationwide suggest that the FAFSA’S shortcomings have to do with more than the form itself. As Jessica Lahey wrote for The Atlantic last year, "Twelve years of compulsory education in mathematics leaves us with a populace that is proud to announce they cannot balance their checkbook, when they would never share that they were illiterate."

At least one university is trying to change that, however, making it easier for its students to understand their college finances. For Indiana University, a public state system with seven campuses, all it took were the distribution of personalized letters among students 2012 each individual's personal debt situation post-college. The result? $31 million less in borrowed loans over a nine-month period.

Sample 'Current Student Loan Indebtedness' Letter

Indiana University

Jim Kennedy, the university’s financial-aid director, recalled how the idea came about: "We just wanted to make sure that students really understood their loan debt," he told me. "What happened is that students would come to the university and do counseling for federal loans, but then they wouldn’t get any information until they leave and do the exit process. Between the start date and the end date? That’s four years."