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More students are completing the FAFSA early for 2009-2010 according to data collected by the Department of Education.  By the end of February, more than 3 million students had filed their FAFSA for the next academic year, an increase of over 20 percent from the first two months of 2008.  As application deadlines approach, this flood of applications could slow, but right now it looks like there will be more demand for financial aid in the coming school year.

Federal student financial aid is becoming an increasingly attractive means of paying for college.  For starters, federal aid is up for 2009-2010--in the case of Federal Pell Grants, way up.  A combination of factors has boosted maximum grants to $5,350 in 2009-2010, while simultaneously raising the minimum award to $976 and the maximum qualifying Expected Family Contribution to $4,671.  Low interest rates and expanded federal loan cancellation and consolidation options are also making federal student loans more appealing.

Meanwhile, several other payment options aren't doing so well.  Private loans became harder to obtain in 2008, and also saw fairly substantial interest rate increases.  College savings plans, such as 529 plans, took big hits in the stock market, and even some prepaid tuition plans are struggling to guarantee payouts for upcoming years.  College endowments have also been affected by financial troubles, and some endowed scholarships may be reduced or unavailable for the coming academic year.

However, this doesn't mean the FAFSA is the only option for student financial aid.  Most states are maintaining funding for their scholarship programs, many colleges are increasing aid where possible, and scholarship opportunities are still out there--though many deadlines are approaching--for students who are willing and able to take the time to do a scholarship search and complete some scholarship applications.

As prospective college students are making their final decisions and sending in deposits to their schools of choice, many are finding themselves unexpectedly short on financial aid.  The New York Times and Los Angeles Times each ran a story today on California high school seniors struggling to pay for school in the midst of their state's continuing economic woes.  State budget difficulties have caused schools to limit enrollment and stretch institutional aid even thinner, while high unemployment means more students need more aid than before.

Students in Florida are also struggling to make up for an unexpected gap in their financial aid.  According to the Miami Herald, recipients of the state's Bright Futures scholarships will not see an increase in their awards next year, despite projected tuition hikes of 8 to 15 percent across the state.

Other states and university systems are also facing difficulties meeting students' full financial need, so many other students are likely to be in this boat.  If you've completed a FAFSA and applied for institutional and state aid, but are still short of what you need to pay for school, there are still scholarship opportunities out there, even this late in the game.  For example, Scholarships.com is currently accepting applications for our Resolve to Evolve Scholarship, a $1,000 award that can be applied towards your tuition next fall. There are many other college scholarships available. You can find out more by doing a free scholarship search.

Student financial aid programs in several states may soon fall victim to sweeping budget cuts necessitated by the recession.  Ohio, Florida, Michigan, and California are all considering proposals to reduce or eliminate some state student aid programs, including popular grants and scholarships.

Ohio and Florida are both making slight changes to rules in existing aid programs, resulting in less aid for some students, but mostly leaving financial aid intact.  Florida is capping their Bright Futures scholarship so it no longer covers all of students' tuition or tuition increases, while Ohio is changing rules in their Ohio College Opportunity Grant to focus aid towards tuition and fees at public schools.

California and Michigan, however, are making far more sweeping cuts.  California has proposed eliminating CalGrants, a popular state grant program, for incoming college freshmen and cutting CalGrants for current college students.  Michigan may eliminate the Michigan Promise scholarship and make sweeping cuts to several other state financial aid programs, including work-study.  Students in both these states could find themselves suddenly thousands of dollars short on college financial aid.

While federal stimulus money has mitigated some of the damage in many states, in Michigan it has also played a large role in the proposed cuts to financial aid, according to The Detroit News.  Since a provision in the stimulus legislation prevents states from drastically reducing funding to higher education institutions, Michigan may be forced to turn to cutting state grant and scholarship programs to make up some of their budget deficit.

While some state aid and loan forgiveness programs are being reduced or eliminated, financial aid is still available.  Many college are actually increasing their budgets for university scholarships, and private foundations are still offering scholarship aid, as well.  Federal student financial aid has also seen some increases in the last two years.  Money is still out there if you know where to look, and a great place to start is doing a free college scholarship search.

As the start of the fall semester approaches, students across the country are finding themselves in a precarious position when it comes to financial aid. As we've previously mentioned, several states have been forced to make deep budget cuts this year, canceling or reducing funding for scholarships and grants, in some cases after award notices have already been sent to students. This has left students scrambling for last-minute student loans, and in some cases facing the difficult decision of whether to take a semester off while trying to procure alternate funding.

The Wall Street Journal and U.S. News both feature articles this week that offer up alternatives for students who have come up short on funding for the fall. While scholarship opportunities are still available for the coming academic year and should be pursued, students who need immediate sources of funding may want to check out private loans, peer-to-peer lending, and emergency loans and other aid offered by some universities and state agencies. Reducing to part-time enrollment or transferring to a cheaper school are also last-resort options that may be better choices than taking an entire semester off or putting tuition on a credit card.

An appeal to your college's financial aid office can also produce more financial aid, especially if your financial situation has changed since you completed the FAFSA, or if your parents were turned down for a federal PLUS loan. Additional loans, and even some grant aid, may be available if you ask.

In addition to trying to find new sources of funding, some college students are also petitioning their state legislators to get grant and scholarship funding restored.  Lawmakers in Utah have listened, promising to reinstate full funding to the state's New Century Scholarship program, whose awards they had previously planned to cut nearly in half. Students in Michigan also may yet get a reprieve from budget cuts, as the governor of Michigan and numerous state legislators are vowing to do what they can to keep the state's popular Promise Scholarship program intact.

Even if states manage to find funding for grants and scholarships this year, the next fiscal year could also prove challenging. Students in cash-strapped states who are planning to rely on state scholarships to pay for college may want to start looking into alternate funding now.  One of the best ways to do this is to start with a free college scholarship search.

Earlier this summer, it came to light that for some students in Illinois, being accepted by state colleges was less about what they knew than who they knew, as an investigation into admission practices revealed the existence of a special clout list of well-connected applicants to the University of Illinois. Now, the Associated Press is reporting that some college scholarships in the state may be governed by a similar principle.

Each Illinois state representative is given the equivalent of two four-year full-tuition scholarships to award to his or her constituents each year. Some representatives choose to break up their scholarship awards into eight one-year full-tuition awards, while others choose to hand out two-year or four-year scholarships. At least 83 of these scholarships went to students with some form of political connections between 2008 and 2009. Of these scholarships, 41 went directly to the children of donors to the politician making the award.

Representatives deny impropriety, but it seems that families in Illinois who have seen their 529 plans shrink in the recession may want to consider taking their college savings and investing them in their representative's next reelection campaign.

Attending community college is a great way to save money on the first two years of higher education, but for many students, paying for school after they transfer to a four-year college or university can still be difficult. Now, transfer students in Alabama will get help with their last two years of school, thanks to a new state scholarship.

Alabama has launched a new scholarship program for graduates of the state's two-year community and technical colleges that will allow them to receive a bachelor's degree for free. Alabama State University and Alabama A&M will each award 250 two-year full-tuition scholarships starting this fall, with the number of available scholarship awards to double to 500 apiece next year.

Initial funding for the scholarship program comes from the state's Education Trust Fund, and is part of the settlement in the 28-year-old Knight v. Alabama segregation lawsuit.  Knight, the lead plaintiff in the suit, is now a state representative and vows to do what he can to ensure continued funding for the program as long as he's serving in the state legislature.

Initially, 50 students have been awarded the scholarship, but the state is working to identify more eligible students. Students in Alabama who are planning to attend a community college then transfer to one of these two state schools will want to keep this scholarship in mind. Other local, state, and national awards are also available to students who are attending community college and planning to transfer to a four-year college or university.  More information on these and other scholarship opportunities can be found by conducting a free college scholarship search.

Even in the face of a continuing recession, new scholarship opportunities are being made available to students in a variety of situations. Recently, students in two communities in Michigan, a state hit especially hard by economic problems, have received news of scholarship programs that will give them significant help paying for school, even as the state considers cutting funding to one of its largest merit scholarship awards.

Baldwin, a community in rural northern Michigan, is the first to take advantage of the state's "Promise Zones" program, which allows areas with a high percentage of poor students to use state property tax funds to provide college scholarships for their students. Baldwin plans to offer scholarships of up to $5,000 for up to four years to current high school seniors. Up to nine other high-poverty communities in Michigan are eligible to participate in the program, provided they, like Baldwin, raise money to fund their scholarships for the first two years of awards. The Promise Zone funding, like the state's endangered Michigan Promise scholarship, were inspired by the Kalamazoo Promise scholarship, a full-tuition scholarship award created by an anonymous private donor that allows graduates of Kalamazoo public schools to attend any college in Michigan for four years.

Another Michigan community has also unveiled a substantial scholarship program for its high school students, this time a four-year full-tuition award to Finlandia University for all graduates of public schools in Hancock, a tiny mining town in the state's Upper Peninsula, who gain admission to the college. The scholarship program was created as Finlandia's way of paying the community for the use of a building that the school district no longer needed. Rather than working out a traditional payment plan for the purchase of the building, something complicated by tighter credit requirements, Finlandia proposed a deal that would provide more immediate and tangible benefits to the students of Hancock. The scholarships will be offered to members of Finlandia's current freshmen class and to subsequent graduates of Hancock's schools.

Local scholarships like these exist for communities nationwide, and are likely to seek out inventive ways to find funding, as community members are committed to helping their neighbors succeed. To find out more about scholarship opportunities for students in your area, conduct a free scholarship search.

Did you already file your FAFSA this year? If you live in Illinois, your early bird mentality will help you pay for college because state funding has run out earlier than expected.

Officials said the state’s primary source of need-based financial aid, the Monetary Award Program (MAP), received 40,000 more applications this year than last. "It's a sign of incredible demand more than anything else," said John Samuels, spokesman for the Illinois Student Assistance Commission but since these scholarships are awarded on a first-come, first-serve basis, students who applied after March 13th – roughly 140,000 – will have to find alternate funding. Illinois currently provides at least $387 million for the program and Governor Pat Quinn has proposed increasing that amount by $50 million to give financial assistance to 35,000 additional students – though it would take $1 billion to for every eligible student to receive a MAP grant.

Does this news impact your college plans or did you submit your financial aid forms in time?