It turns out that the economic crisis has engendered a spike in financial aid applications, most commonly known as FAFSAs. On average the number of applications increased nationally by 16 percent over the last year. This suggests that families are worried about the ability to pay for college, and though not all of those new applicants will get aid, many will. Inside Higher Ed published a chart that shows some of the top increases by state:
Some schools, like Duke in North Carolina, will be reaching into their sizable endowments to meet for the increased demand for aid. Others will scramble and possibly have to ask for more money from state budgets if they are public schools.
But this aid crunch has created another problem. The New York Times reported that because of the increased demand in Pell grants, next year will likely see a shortfall of $6 billion in the national budget. As of August 31 this year, 800,000 more students applied for Pell grants than had last year. Ultimately this is good because Pell grants go to the students that are the worst off--the most unable to pay for school. But as I've written before, the buying power of the Pell grant has declined significantly over time.
Cross posted at Pushback.