US: Private colleges looking to rein in financial aid

In the last year, America's private colleges have laid off staff, shelved construction projects, slashed sports teams and turned down thermostats to cut costs. But student financial aid has kept flowing, writes Eric Gorski for Associated Press. Now the weak economy is forcing some institutions to limit their generosity after many of them doubled or even tripled financial aid over the last decade to attract more applicants and reduce student debt.

Two of the nation's most selective private colleges -- Dartmouth and Williams -- announced they would no longer offer aid packages that allow students of any income to attend without taking out loans. Other schools are expected to follow suit, meaning many middle-class students will have to take on more debt.

Situations vary depending on the school, but experts expect financial aid at private schools to be less generous than last year while colleges increase tuition by 4% to 6%. Many colleges dipped into savings last year to substantially increase student aid out of concern their enrolments would plunge because of the economic downturn -- fears that went unrealised at most schools.
Full report on the Associated Press site