The current economic crisis has ravaged college endowments and prompted a host of reactions among campus officials. One of the most subtle, yet potentially profound effects of the downturn has been a shift in the way government and campus officials approach financial aid--from a focus on merit to one of real need--as colleges and universities scramble to recruit and retain cash-strapped students.

Johnny's a middle-class student who worked hard to get good grades and a high SAT score. Jane's record isn't as good, but her family is low-income, and without help she might not be able to go to college at...

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