<p>"Home builders and banks aren't the only ones facing economic headwinds these days. America's undercapitalized independent colleges are staring at a spiral of major threats to solvency as penny-pinching students and parents consider cheaper options, and funding sources dry up. As a result, they could be the next bubble industry to pop.</p>
<p>The crush is coming fast. According to a September 2008 study by the National Association of Independent Colleges and Universities, of the 504 member institutions surveyed, one-third said the credit crunch had hurt enrollment, and about a fifth of respondents said they had fewer returning students than expected. Roughly the same number said they had a smaller incoming freshman class than expected.</p>
<p>But while head counts slide, needs rise. Demand for student aid is up, but charitable donations from foundations and individuals will fall during a downturn. Ditto for investment returns. And thanks to tanking tax revenue, federal aid may take a hit, too. Taken together, many independent institutions start to look vulnerable. ..." A</a> coming college bubble? - U.S. business - MSNBC.com</p>
<p>Where's the list of the wealthiest 10 % of colleges ? To be practical, it would make sense to choose an over-enrolled public or a private with deep pockets.</p>
<p>Our daughter, a freshman at a small and well regarded liberal arts college, just forwarded us an email from the President of her school saying that the school would be starting layoffs this month of staff and faculty to try to make up the deficit in the budget. Not what we wanted to hear, especially since she receives no scholarships or grants. So now after two years of high anxiety about getting into school, it seems we will have high anxiety about the school's survival. And we thought we had looked at the financials carefully. I guess the colleges can hide what they want to hide. I am wondering this evening if she should start thinking about a transfer to a large school.</p>
<p>I know this sounds insensitive, but the current crisis may be a good "dry run" for where many colleges may be ten years hence. With higher ed costs rising at 11% per year, either colleges will need to find lots more students who can afford $100K/year, or schools will need to find a lot more money for financial aid.</p>
<p>Only a few states are still showing a surplus and those tend to be oil and gas producing states. I have a son at a large private, very wealthy, and a large public. I am worried about tuition increases at the public school. That is bad enough without worrying about a school closing. perhaps more students transferring to the public will offset some tuition increases.</p>
<p>Almost makes me feel guilty that my state is looking at a surplus and property tax rebates this year.</p>
<p>Wow, onceburnt--usually the last place a college wants to cut is its faculty (unless it is part time). They'll cancel construction projects, defer maintenance, you name it--so sorry to hear about your D's college. Times are scary...</p>
<p>These are indeed scary times. Tuition costs continue to rise, while our family investment savings dwindle. I'm amazed at the huge endowments held by some schools --- and the money appears to keep flowing in. I heard yesterday that UChicago received a gift of $300 million from some rich guy, and I recall a few months ago that T.Boone Pickens, the rich oil&gas guy, gave $100 million to Oklahoma. </p>
<p>Wouldn't it be something if President Obama's "wealth redistribution" program covered not only businesses and individuals, but also colleges. The government could shift billions from the endowments of mega-rich colleges to those colleges in need, or fighting for survival. What better use of these endowments than to spread the money so students everywhere have the opportunity at a great college education. Rich guys seem to ignore gifting to our country's non-prestige schools. Speading the wealth would combat our unbearable tuition cost increases, and should also help spread the quality of professors among the colleges. College rankings would lose their importance. Like VP Biden said about redistribution: "its not just because its fair, its what makes the economy go." I think i also heard it was "patriotic". What a wonderful gift to America's colleges and students ... the sooner the better. We need financial help right now!</p>
<p>I was upset last night about the college President's email, but woke to a front page NY Times article citing other colleges having the same concerns. Misery loves company? But we still plan to take a cold, hard look at the college's endowment and budget this week.</p>
<p>USC sent out a letter implementing a staff (not faculty) hiring freeze through June '09, along with a halt to new construction projects.</p>
<p>I read somewhere the other day (WSJ or NY Times) that Obama was interesting in having some of the TARP money go towards student loans. It did not specify whether this was for existing loans, where people are in trouble, or new ones.</p>
<p>It seems to me, given the life story of our president-elect, that he will not be tone deaf to the needs of college students. The big question is where this will fall on the priority list of other critical needs.</p>
<p>Meanwhile, I saw a Time magazine slide show, showing the evolution of dorm rooms. It was pretty interesting. I wonder, for the country as a whole, just how much of the increased costs for college are due to the posh living quarters some students now have, living quarters that probably will exceed the quality they can get once they are done and get their first job after college.</p>
[quote]
In the dark of night over the weekend when most people were snoozing, the Treasury dramatically expanded its bailout plan to include buying student loans, car loans, credit card debt and any other "troubled" assets held by banks. </p>
<p>The changes, which were included in draft language that also opened the bailout program to foreign banks with extensive loan operations in the United States, potentially added tens of billions of dollars to the cost of the program. </p>
<p>Although it was a major addition to what was already the nation's largest-ever bailout, it did not become part of the debate between Democrats and the Treasury over details of the program. A Monday counterproposal by Senate Banking Committee Chairman Christopher J. Dodd included such consumer loans as well as mortgages, just as the Treasury's draft did Saturday night.