SOUTH BEND — As the credit crisis gets worse, panic is starting to set in for a new group of investors: college students. Millions of students across the country are asking the same question: will they still be able to pay for school?

Financial aid requests are already up at some local schools.

At Notre Dame, borrowing is up, according to Financial Aid Director of Student Finance Strategies Joseph Russo.

"Our students are borrowing $33 million dollars this year, including $26 million for undergrads alone. About 45% are receiving government loans now, and about 20% more are receiving private loans" said Russo.

Notre Dame isn't alone.

"We've seen more students apply for financial aid," said Saint Mary's College Vice President for Enrollment Daniel Meyer. "About 16% more students filed this year for aid than last year."

That encompasses a wide variety of students.

"About 60% of our students qualify for need based assistance. But when you look at the total scheme of things, about 90% of the students are receiving some form of assistance," said Meyer.

Many are now unsure if that will continue.

Indiana University South Bend dental hygiene student Lauren Kovacs is one of them. For her, life these days is all about hitting the books. Lately, she's also been studying something else: the economy.

"It's a big issue, especially with my friends that pay for everything themselves. I rely strictly on loans and grants and things. And to think that all of a sudden there might not be that money there, it makes me wonder, what am I going to do?" said Kovacs.

"Next school year I'm going to need even more loans because I'm taking more credit hours in my last year of school. I don't think there's going to be that much money to go around," she added.

She isn't alone.

Anxiety is suddenly sweeping across America's college campuses as students wonder whether where next semester's or next year's funds will come from.

Experts say most students who are already borrowing directly from Uncle Sam through loans like Stafford or Perkins, won't notice any difference.

"Because those interest rates are fixed. Subsidized are fixed at 6%. Unsubsidized are fixed at 6.8%," said Indiana University-South Bend Interim Director of Financial Aid Cyndi Lang.

According to CBS News, fewer than half of the nation's schools participate in direct lending programs.

The rest rely on financial assistance from banks or private lenders, and that's where the problems start.

"Those variable rates are going much higher," said Lang. "And the credit you need to have in order to receive the loan is much more strict."

More than 50 private lenders have already suspended new government backed loans. Many of the lenders who haven't have instead raised interest rates, in several cases as high as 19 percent.

With tighter restrictions and sinking confidence, banks are much more cautious. Even the nation's largest private student lender Sallie Mae is putting tighter restrictions on who gets what.

"They're not eliminating the loan programs, but they're making it tougher for families to borrow," said Meyer.

In many cases, those that are approved for loans aren't receiving as large a line of credit.

"This is the worst I think I've seen it ever. I'm seeing more concerns from families, genuine concerns, that it's impacting their ability to finance and education," said Meyer.

Add to that the skyrocketing costs for tuition, books and college life, and students like Kovacs are suddenly being forced to study their options, hoping they'll pass this test too.

"I'm really anxious about it, just not knowing what to expect," she said.

Congress did approve a bill that gives students additional access to direct government loans through the 2010 school year, regardless of what happens in the private credit market, according to the Associated Press.

Meyer says most schools are doing their part, too.

"Even though these are tough times for everyone, colleges are responding accordingly. Most colleges haven't put a cap on their financial aid," he said.

"This should not be a reason for anyone to put off going to school," added Lang. "There are lots of options available, including grants to scholarships. The best thing to do is talk to your financial aid advisor to see what options are out there."