The problems

HBS and KSG, two of the schools most aggressively expanding their mid-career programs, were the first two to feel the squeeze put on their traditional master's and Ph.D. students.

The KSG cut back the number of Masters of Public Policy (MPP) students this year from 850 to around 750. Officials say this cut was only slightly related to expansion in executive education, but also have no plans to increase MPP enrollment, even as they add faculty.

The same process has already taken place at HBS, where MBA enrollment has held steady while 40 new faculty members were added over the last three years. At both KSG and HBS, the extra faculty were added to free up professors for mid-career teaching.

At a number of other schools, faculty teach mid-career courses in the summer or on days off. But as the number of mid-career courses increase, faculty vacation time will run out and the University will hit the bottom of its piggy bank for faculty hires.

Rudenstine says graduate schools will soon have to choose between their bread and butter students and a new gig that looks more like consulting than teaching.

"I don't know if anybody will cut back their first-degree programs," Rudenstine said. "But every one of them will have to think out this problem."