Financial Aid Applications Jump 17 Percent

As fast-rising tuition hikes outpace income, more families need financial aid each year.

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Although the number of college students is not expected to rise dramatically this fall, the number of applications for financial aid has skyrocketed by almost 1.3 million, or nearly 17 percent.

The federal government has reported receiving almost 9 million Free Applications for Federal Student Aid in the first six months of the year. The FAFSAs are generally supposed to be filed by March to qualify for aid for the academic semester starting in September. (But some schools will accept applications filed as late as September.) Last year, the government had received just over 7.7 million applications during the first half of the year. College enrollment is expected to jump by only about 300,000.

Financial aid officers and researchers said that some of the aid application increase is due to the constant increases in college prices. Every year that tuition rises faster than incomes, more students qualify for financial aid. In addition, recent economic troubles such as layoffs and declines in the value of homes and stock investments mean that some students who were able to afford college last year need financial help this fall. The credit crunch also very likely contributed to the spike. Many students and parents may be filing the FAFSA to get access to federally backed student loans, because private lenders, which don't require the form, have dramatically reduced their lending.

But Donald Heller, director of the Center for the Study of Higher Education at Pennsylvania State University, says the increase might actually be reflective of a little good news—that students are figuring out how to apply for the aid they need to attend college. Studies have found that millions of students who might have been eligible for aid don't apply. Heller says the recent student loan scandals, and headlines about the increasing generosity of schools such as Harvard, have informed and encouraged more students about the availability of aid.

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