As Credit Crisis Freezes Colleges, Worries Mount

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When the stock market plunged 778 points this week, losing almost 9 percent of its value in one day, higher education responded in an uncharacteristic way: It began to buckle.

Colleges have often considered themselves recession-proof. But this week’s events compounded an already difficult year for many institutions, which have suffered from declining state support, tightening credit, and losses on endowment earnings. As a result, the financial meltdown—with its promise of a prolonged economic downturn—prompted some institutions to take radical steps and wreaked havoc on the way colleges do business.