Friday, March 13, the last day of second-term classes, was a crisp, late-winter Michigan afternoon. Exams would start Monday, but many Michigan State University [MSU] students had more important things on their minds. More than 500 undergraduates stood outside the Administration Building, carrying signs and chanting slogans. University President M. Cecil Mackey tried to slip in unnoticed through a back door, but the protesters spotted him and chased him.

Temporarily frustrated when the president jumped into an elevator and rushed into his fourth-floor office, a group of students followed in other elevators. As Mackey hid inside, the demonstrators continued their verbal assault in the hall and pasted "Mackey Mouse" stickers on the walls. Minutes later, someone spied the president escaping out a rear exit, and the crowd followed him outside the building, where an unmarked police car rescued him and sped away.

The cause that drew students into the streets of East Lansing in numbers unmatched since the bombing of Cambodia was neither solidarity with people halfway across the world, nor opposition to their university's "immoral investments." (MSU divested of its holdings in companies involved with South Africa several years ago, one of a handful of educational institutions to do so.) The driving force behind student militancy this year was self-preservation. Students sought to shield their academic interests from the budget ax, as the MSU administration struggled to cope with a budget deficit that was out of control.

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The coming decade threatens to be a damaging one for higher education. Like every segment of society, colleges and universities must contend with mammoth costs brought on by rampant inflation. The past 20 years have been an era of growth for higher education. Now, too many institutions will have to complete for a tighter market of students because of a drop in the college-age population--a large portion of which is cynical about the value of a degree in a world marked by rising tuition and cab-driving Ph.D.s. Compounding these problems is the Reagan-Stockman offensive against federal spending, which will chop away at college budgets throughout cuts in grants and student loans.

In the difficult years ahead, most universities will have to cut back, and some may go under. Though all have felt the effects of economic hardship, one of the most serious victims to date is Michigan State University.

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"It Has been apparent for some time that MSU is confronted with its most difficult financial problems of modern times." President M. Cecil Mackey,   State of the University address,   February 12, 1981

While the rest of the country has been slowed by a recession, the state of Michigan has been paralyzed by what some call a depression. The state's well-being depends on the automobile; with Chrysler faltering, and Ford and General Motors cutting back, Great Lakes State residents have been especially hard hit. Even after Draconian cuts in the state budget--including $100 million from appropriations for higher education--Michigan still faces a $150-million deficit.

MSU depends heavily on state aid. Sixty-five per cent of its $200-million operating budget comes directly from state coffers. When Gov. William G. Milliken decreased the university's budget by $16 million this year--the legislature traditionally had appropriated increases that compensated for inflation--he pushed the university into making the most severe budget cuts of its 126-year history.

Last December, school officials tried to save money by placing all university employees on a two-and-one-half-day payless furlough. Weeks later, it became apparent that more drastic action was needed. On February 6, the board of trustees, staring at a calculated $30-million deficit, voted to declare Michigan State University in a "state of financial crisis."

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"They decided they would not try to compete with Harvard, but rather to serve the masses."   Frederick H. Horne '56,   MSU professor of chemistry

Much of MSU's problem can be traced to what Mackey calls its attempt to "be all things to all people." Founded as the original land-grant college. MSU has based its development and curriculum on the philosophy of providing good education for a wide variety of people. Today, the university serves more than 40,000 students, boasting the second-largest on-campus population in the nation.

The university already has one of the highest public-school tuition rates in the country, and school officials feel reluctant to increase tuition much higher, fearing that doing so would scare off many potential students.