For many colleges, the last 15 years have been a golden age. Philanthropy and Americans' grudging tolerance for high tuition fueled an unprecedented boom _ investments in everything from gyms, dorms and labs to faculty and expanded financial aid.

Now, suddenly and like the rest of us, many colleges are faced with toning down their ambitions, at least in the short term.

The financial meltdown is forcing institutions to tear up budget plans and prepare for a simultaneous hit to their three major revenue sources _ government funding, donations and tuition. At the same time, they're having to find more money for one of their major budget items _ financial aid _ or risk seeing students drop out.

"They're coming in and saying, 'I need a little more help,'" said Jerry Cebrzynski, financial aid director at Lake Forest College outside Chicago, which cut several class offerings and froze last year's operating budget in part to make more aid available. "I think we're seeing just the tip of iceberg."

Cebrzynski recently managed to find another $5,000 for one family where the father lost his job and the mother has cancer.

"We'll do what we can with this year's budget and honestly operate with a deficit, a larger deficit than we thought," he said.

In many ways, colleges have an enviable position. They can afford to invest for the very long term. Many have endowments to cushion the blow of downturns, and demand for higher education holds up or even grows when the economy goes south. That's why you hardly ever hear of an accredited college going under.

But the financial events of recent weeks have been momentous enough to shake even sturdy ivory towers. Giant Boston University and tiny (but wealthy) Grinnell College in Iowa are among those delaying big projects, while numerous schools will postpone fundraising campaigns.

"I'm not going to press people now for a lot of funding. The time just wouldn't be right," said John Fry, president of Franklin & Marshall College in Pennsylvania, who moved about $1 million from other programs to bolster aid this year. Fry says a fundraising campaign will likely be delayed and scaled back, and it will likely focus more on financial aid.

Generally, Fry says F&M is in good shape, but he's glad it recently finished several big projects. Now isn't the time to start one. And asking parents to pay substantially more next year would be "unseemly," he said, echoing the thoughts of several presidents interviewed this week.

The worries for private colleges include falling endowments and cost-conscious students passing them over for cheaper alternatives. For public universities, state funding is almost always cut in a recession.

On Thursday, Virginia Gov. Tim Kaine announced plans to cut college funding at least 5 percent, to help plug an expected $2.5 billion budget hole over the next two years. Individual schools would see cuts of as much as $10.6 million.

But for colleges, this isn't just a predictable replaying of past downturns. In the mild 2001 recession, for instance, colleges weren't badly hurt because home values held up, notes John Nelson, who follows higher education finances for Moody's Investors Service. But with home prices plunging, home equity may no longer be a reliable last resort for parents to tap for tuition bills.

A totally unexpected problem this time: interest rates in the variable rate bond market, where colleges borrowed cheaply for years, have jumped from 1 or 2 percent to as high as 10 percent. If credit markets don't thaw, some colleges could spend millions more than they planned simply servicing their own debt. Continued...