<p>Let's assume the worst about the current state of the economy. Say as of next fall there is hyperinflation around 20% a year with stagnant growth. How is financial aid going to change in this situation? We all know colleges are essentially businesses, so they are going to be going through issues as well. How are colleges going to cope? Are schools that meet 100% of financial need still going to meet of that financial need? How and where are schools going to cut costs? It seems like when schools have more costs they just raise tuition, but in this economy it seems like many students would not be able to afford that increase.</p>
<p>In the current economic situation it seems that students are the most vulnerable because we have no actual jobs. I myself am terrified about not getting enough financial aid next year to return to college so I can finally get my degree. It is going to be awfully harder to get private loans next year, right? And the interest rates will probably be through the roof for those who get the loans? How are students going to cope? Will schools that meet 100% of financial aid be increasing aid next year in light of the current economic situation?</p>
<p>Your assumptions go far beyond worst case. Schools that currently meet 100% of need probably have deep enough pockets to weather the storm. The real issue is the vast majority of schools that do not meet full need. They will probably take financial aid into consideration in admissions even more than they currently do. They will also look to "cherry pick" top students with merit aid.</p>
<p>The larger gaps this will create will need to be met by additional loans, which the Federal Gov't will undoubtedly work at making available. The real worst case is that you will have to go to an instate school and take on additional debt beyond your current plans. But it is still doable.</p>
<p>Some schools got hit harder than others, but MWD is probably right that well-endowed schools will remain as such, and financial aid will be relatively unaffected. Additionally, not all endowments are exposed as others. Pomona, for example, informed students "not to worry" that it is "well-diversified" and is actually turning a gain despite the financial turmoil.</p>
<p>I know one state school that is moving funds from merit-based to merit/need or just need (depending on endowment restrictions) in order to maximize assistance for those who need it most. Unfortunately, this school is in an are especially hard hit by the current economic situation. The need for assistance is sure to be greater than the dollars available.</p>
<p>I worry, because I already see students taking out huge loans. Parents are being denied PLUS loans. Things are going to get very tight. I think community colleges will be an increasingly popular choice.</p>