Colleges Learn to Navigate the Credit Crunch

How higher education--and one liberal-arts school in particular--is grappling with the market meltdown

Saverio Truglia for TIME

To help cut costs, college students in Beloit, Wis., are embracing energy-efficient lightbulbs and trayless cafeterias

As the semester began in September, Wisconsin's Beloit College found itself 36 students short. Some of the no-shows at the small liberal-arts college had enough credits to graduate early. Others, with an eye on the souring economy, chose to either delay their education or go somewhere cheaper.

Whatever the reason, the 36 absentees have had a big effect on this bucolic 1,300-student campus, a two-hour drive north of Chicago. The lost tuition was the primary factor in creating a $1 million budget shortfall that is leading the school to lay off nearly a tenth of its staff — including all nontenured...

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