A significant jump occurred this year in the number of students who applied for federal financial aid. With the economy continuing to plummet, more families are calling upon the government and the university financial aid office to provide relief of the rising cost of everything, including tuition. But not every college is answering.

16% more families filed the FAFSA (Free Application for Federal Student Aid) this year than did in the first half of 2007. The most populous state of California reported an increase in close to 20% of families filing for federal grants. However, public universities in California have seen an 11% rise in tuition this year due to the state’s massive budget crisis. And with more families filing for federal aid, the financial aid office is strapped much thinner than previous years. The state hasn’t even decided on a budget for the current fiscal year yet – that’s over six weeks late!

There’s a general rule that you should never apply to a college or university because you think you can’t afford it. Even the most expensive private colleges can provide financial aid and scholarship packages to make it just as or even less expensive than in-state universities. But is that changing if parents can’t afford to pay for any part of tuition? Or worse, they can’t get even their credit approved for education loans?