When the economy slips into recession, more needy students enroll in college, increasing the need for financial aid while resources for aid become more scarce. We use “Freshman Survey” data from the Higher Education Research Institute to observe changes in financial aid composition from 1980 to 2000. We use state‐level tax revenues, unemployment rates, and personal income growth as macroeconomic indicators. During recessions, we find that the burden of financing a student's college education shifts from states and institutions to families and federal programs. We also show that these macroeconomic fluctuations are increasingly volatile for underrepresented minorities. (JEL I22, H52, E32)