In the first half of 2008, 8.9 million students filed for federal aid, a 16.3 percent increase from the same period last year. In California alone, there have been almost a million students requesting financial aid.
The slowing US economy is likely to blame, with a perfect storm of less available federal aid and parents losing their jobs. Some go to financial aid offices with both parents unemployed and their homes in foreclosure. Cost of living and tuition have also gone up and students are feeling the pinch.
Some school financial aid offices have extended repayment plans in an effort to curb students from simply dropping out of school.