what!? if universities can't have their research funded by grants, they just don't do the research. if a professors grant funding gets cut and he can't pay that grad student any more, they don't pay the grad student out of tuition funding, they just let them go.
This is what is happening right now in higher education, it is going through a structural change. MIT and Harvard will continue to be fine, at Purdue and Carnegie-Mellon they have to struggle a little harder, but they will be fine. Lesser places have no chance.
I cannot see how they will deal with it. In my department 80 % of the undergraduates go up to medical school. Up to now, the deal was that you had to have some kind of research experience as an undergraduate to be accepted at a decent school, but this is going to change, as grant income is shrinking. No cash, no research, no honour's theses. The current plan is that they hired several new professors in a bid to get grant income, but this isn't going to succeed.
Half of the full professors here have no grants. The social contract has always been that professors pull in grant money, that is what justifies their salary, as compared to teaching-only staff. But now they haven't got grants and won't get any ever, and you can't explain that to the taxpayer.
