HIGHER ED GETS HIT: In the past few months what started as a banking crisis has spread through a wide array of disparate social sectors, and funding for higher education has not been immune. State budgets and school endowments have felt the effects, and the government has recently taken drastic action to ensure continued access to student loans.

On November 20 the Education Department announced it would shortly begin buying $500 million per week of publicly guaranteed private student loans to supply liquidity to a faltering market. According to experts, unguaranteed private loans will shrink this year by roughly one-third, from $19 billion last academic year to between $12 billion and $13 bil- lion this year. To stem the collapse, Congress recently increased federal loan limits by $2,000, and with applications for federal aid up 20 percent in the first six months of this year, the move may have come just in time.

Talk of legislating a mandatory 5 per- cent endowment payout is circulating in Congress, but endowments are not what they once were. Moody's Investors Service estimates they may devalue by as much as 30 percent this fiscal year. Harvard's massive endowment, the largest in higher ed, has already diminished by 22 percent since the end of June, a loss of about $8 billion--and this doesn't include losses in Harvard's private equity or real estate holdings.

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