I've been trying to think through what such a crisis would mean. Here, I think, is what we would see:
1) A wave of small-college bankruptcies. In my own experience, small, non-elite colleges generally get by by the skin of their teeth in the best of times; most have nothing to offer that students can't get at their own state universities for half the price. (Some background: I spent several years as a college administrator at precisely the kind of college that would be first on the chopping block in a Higher Ed bankruptcy crisis: a small private college of no real academic distinction.) Such bankruptcies will not have a particularly significant impact on prospective students; state universities could absorb their small numbers rather easily. The impact on newly-unemployed faculty, however, would be enormous; small-college faculty tend not to have significant publication records, making them pretty much unemployable at a research university.
2) An influx of foreign students. It's not a big secret that foreign students are the cash cows of higher ed, since they almost always pay full price. As money gets tighter, expect to see colleges try to recruit more and more of these. This will ultimately set up a showdown between colleges and the State Department, since State has fairly stringent visa requirements for students.
3) Post-Millennial feudalism. When I graduated from college almost 30 years ago, I did so with a degree from an elite university that certainly opened some doors. However, my classmates and I have not done significantly better than our friends who graduated from state universities or non-elite private colleges. However, with my daughter's generation, that no longer seems to be true; the right school seems to matter more than ever, and graduating without the need to service debt puts you in a much better position than those poor souls described in the Times series. The class gap between college-educated twenty-somethings with elite educations and no debt, and everyone else, seems poised to be one of the greatest class gaps in US history.
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