I've been watching a lot of cable news lately—the election and all. But the big news the past few days is, of course, the financial crisis. I'm wondering how it will affect me. Luckily, I'm a moron when it comes to financial instruments, so I keep all my money in my mattress. Not really—it's in a low-yield savings account that's FDIC-insured. (Thanks, big government!) I'll be just fine, thanks. For now. But in ten years....?
What does the financial crisis mean for higher education, and for those of us who will hopefully finish our dissertations within the next few years? I really have no idea. Like I said, I'm a moron about the "finance." But I don't think it looks good.
First of all, consider the importance of credit to students and their parents. Something like three fourths of Cheeseville U. students are on some kind of financial aid; 57 percent have student loans. I don't have statistics on parents taking out home equity loans, but I'm sure that's pretty high, as tuition at Cheeseville has gone up and up and up, as it has at institutions all over the country. Of course, Ben Bernancke et al. are on the case* so that we can still have access to credit. But seriously? Will kids and their parents be able to afford higher education in a few years? Fewer students means fewer undermotivated butts in the lecture halls.
Demographics are against us too. There are going to be fewer students now that the children of the baby boomers are graduating. Employment in higher education was probably going to contract anyway, but if fewer students and their families can afford college, will we also be looking at declining salaries?
The other thing you have to wonder about is the investment portfolios that universities have been building up. Here is another thing I know nothing about. But don't you just wonder what universities have been investing in all these years? Have they been buying these crappy mortgages? Hmmm, I hope no hedge funds. Weaker endowments could mean higher tuition, hence fewer students, hence other bad things. Bad for us.
Finally, this post will end with the hand-wringing that no discussion of academe is complete without, and that's the erosion of tenure and the elimination of tenure-track jobs. Why create a line when the university is in straitened circumstances? Frankly, I'm also afraid that
adjunct positions will be eliminated.
Am I Chicken Little?

*I'm being facetious. They're on the case on behalf of the big guys. See Kathy G's awesome posts over at the G Spot, especially
this one.