It’s not like prices have outrun inflation because of easy credit that people can’t afford anymore. That’s what it takes to have a bubble. So, no worries.Will UT Law suffer in the meltdown? To some extent, I'm sure, although you're unlikely to spot Professor Reynolds standing by a freeway interchange with a cardboard sign, "Will Blog for Food." Expect that a drop in enrollment will cause state schools to cut back on adjuncts, institute pay and hiring freezes, offer some early retirements, and scale back their incidental budgets. But tenure is tenure, and the flagship state schools are likely to weather the storm with relatively minor damage, as are the elite private schools -- the Ivys, Stanford, Duke, Vanderbilt, etc.
Where will the meltdown hit hardest? The smaller private liberal arts colleges will get the worst of it. Kenyon, Colby, Wheaton -- I cite them as examples of a category, without knowing anything about their enrollments or financial situations, so please no angry e-mails from Colby administrators proclaiming how rosy the scenario is. I'm just saying that this general category of school -- private, relatively expensive, but not Princeton/Stanford in terms of national prestige -- is likely to suffer the most from a deteriorating financial picture for higher education.
Another category likely to be hard-hit will be second-tier state schools. Unlike the flagship state universities, the second-tier state schools (and my own alma mater, Jacksonville (Ala.) State University, fits this category) don't have the same level of alumni support as the flagships. JSU graduates are more likely to become teachers or middle managers than heart surgeons or Fortune 500 CEOs. And the second-tier schools are also underrepresented in state legislatures, so when it's time to tighten the belts, the pain is going to be felt more at JSU than at Auburn.
But you know who's really going to suffer in this crunch? The commercial trade schools. This week I noted a story in Forbes about how Sallie Mae had been hurt by making student loans to "kids and parents with poor credit who are at the wrong schools." Even if Obama's "stimulus" includes more money for education, it's unlikely SLMA will continue doling out cash to prop up enrollment at fly-by-night schools that don't provide marketable credentials.
The Forbes story was also blogged by Marc Scheer, author of No Sucker Left Behind: Avoiding the Great College Rip-Off, a book that he says "blows the lid off colleges' scandalous price-gouging schemes."
American higher education has become horribly bloated over the past three or four decades, operating on a growth strategy fueled by hyping the idea that almost anyone can benefit from attending college. The result is that you have lots of mediocre students enrolling as freshmen who have no real possibility of making it past their sophomore years. (The eye-opening account of "Professor X" is worth reading, if you don't understand this phenomenon.)
What we have now is a cargo-cult of credentialization -- a "Doctor of Thinkology" for the Scarecrow in Oz -- that has been made possible by government subsidies in one form or another. And if a global financial crisis can force educators to re-examine their naive faith in the transformative power of education qua education, thank God for the crisis.