Changing Times

An article on MSNBC reports that "State colleges and universities, battered by declining endowments and state funding cutbacks, are facing a new and potentially far more troubling financial challenge. Out-of-state students, who pay a huge tuition premium to attend, are doing something no one ever thought they would: They're staying home.Hammered by the recession, they're opting in larger numbers to attend schools in their home states. In a recent study conducted by the College Board and Art & Science Group, a consultant to colleges and universities, 41 percent of high school seniors said they are giving much more consideration to attending a public institutions close to home in the fall because of current economic conditions. And many schools, including the University of Delaware and Ball State, are already reporting declines in out-of-state applications of as much as 40 percent, while in-state applications are up from 5 percent to 10 percent..."

NYT has an interesting story..."As job losses rise, growing numbers of American homeowners with once solid credit are falling behind on their mortgages, amplifying a wave of foreclosures.In the latest phase of the nation’s real estate disaster, the locus of trouble has shifted from subprime loans — those extended to home buyers with troubled credit — to the far more numerous prime loans issued to those with decent financial histories. With many economists anticipating that the unemployment rate will rise into the double digits from its current 8.9 percent, foreclosures are expected to accelerate. That could exacerbate bank losses, adding pressure to the financial system and the broader economy. “We’re about to have a big problem,” said Morris A. Davis, a real estate expert at the University of Wisconsin. “Foreclosures were bad last year? It’s going to get worse.” Economists refer to the current surge of foreclosures as the third wave, distinct from the initial spike when speculators gave up property because of plunging real estate prices, and the secondary shock, when borrowers’ introductory interest rates expired and were reset higher. “We’re right in the middle of this third wave, and it’s intensifying,” said Mark Zandi, chief economist at Moody’s Economy.com. “That loss of jobs and loss of overtime hours and being forced from a full-time to part-time job is resulting in defaults. They’re coast to coast.” Those sliding into foreclosure today are more likely to be modest borrowers whose loans fit their income than the consumers of exotically lenient mortgages that formerly typified the crisis.Economy.com expects that 60 percent of the mortgage defaults this year will be set off primarily by unemployment, up from 29 percent last year..."