After nearly two decades of soaring growth, evangelical colleges and universities are seeing their fortunes turn downward, and—in a few instances—fall off a cliff. The severely weak economy is hurting private higher education as it is nearly every other business.

Heavily dependent on tuition-paying students, these schools are doing everything they can to maintain their enrollment numbers for this fall 2009 semester. The challenge is immense. Job losses and a growing inability to borrow for college are two major factors at play.

Naomi Spinella is a senior psychology major at Azusa Pacific University in Southern California. Her parents emigrated from Italy to provide more opportunities—including college education—for their children. But her family had to start from scratch when they arrived in the U.S., and by 2007, her family's income was just above $20,000.

When it came time for Naomi and her older brother to enroll, her parents weren't able to afford Azusa Pacific, the school Naomi had dreamed of attending. Instead, she relied heavily on grants and scholarships, which nearly paid for her first two years. She then turned to student loans to make up the difference.

Naomi also relied on California's generous Cal Grant program, which provides grants (not loans) to qualified low-income students. More than 280,000 students expected to receive a grant for the 2009—2010 school year. Instead, California Gov. Arnold Schwarzenegger has proposed phasing out the popular program to save more than $500 million for the state's crippled budget.

Having used Cal Grants for eight semesters, Naomi struggled to figure out how to pay for the rest of her schooling, since she needed four and a half years to complete her ...

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