It doesn't have to be quite that low a level of powerdown. Universities and teachers have existed since the Greeks. There were many universities prior to the Industrial Revolution. Not ubuquitous as they are now, but usually one within a geographically contiguous region.

The fact is, everyone is not suited for college. Yet it has become a business, and thus lowered standards to increase profits. Most students begin their college career by taking the courses which many of us older guys took in high school - higher algebra, calculus, physics, literature, history, etc. They must do this because what is currently taught in high school is drivel - the entire curriculum in any high school is designed around passing as many kids as possible and making test scores on a single exam. Everything else has fallen by the wayside. No dumbass left behind is the rule today.

College SHOULD be for those students with a true aptitude for learning, who are of above average intelligence. It SHOULD be elite, and foster great minds to do great things. I think that this will return, in time, to academia, and that many universities will be closed. In their place, trade schools and agricultural/mechanical schools should proliferate to educate the average person in order to allow them to earn a living. In effect, we will likely return to something resembling academia in the 1940's.

It doesn't matter whether it is Peak Oil or an economic downturn - there are too many colleges, they are too expensive, full of fatcat administrators and catering to the lowest common denominator - cash. Education has become very much secondary to cash flow due to the competitive nature of business. This culture shock, whatever it turns out to be, should force universities back into the business of education and exploration. I think it could turn out even better for those who are true teachers and educators...