College students and their parents should brace themselves for a tumultuous financial aid season. With declining revenue at private universities, financial aid for the 2010-11 academic year could be hard to come by.

Although most universities won’t announce their new financial aid budgets until February, schools are clearly nervous. For the current academic year, private institution spending on aid jumped a median 9.3%, while tuition rose by a median of just 4.1%, according to an October survey by Moody’s. That leaves a gap. How big? Moody’s says nearly 30% of private institutions are projecting a decline in net tuition and fee revenue for fiscal year 2010. That is up significantly from recent years, when less than 10% of institutions anticipated drops in revenue.

What’s more, many private university endowments – which impact how universities subsidize their operating budgets – were hit hard by the market downturn earlier this year and still haven’t fully recovered. This month, Dartmouth announced that its endowment fell by $835 million, more than 20%, during the 2009 fiscal year. And according to news reports, impending