I don't know the situation at MIT in particular but overall creating some budgetary pressures for universities is probably a good thing. Every since it became near impossible to discharge student debt due to legislation in the Bush presidency that was designed to make student loans more easily available, the money spigot has been opened far too wide and this is largely funded by debt taken on by 18 year olds who aren…
Organizations don't really shrink well. When times are good, they hire a lot of people that are marginally necessary. Over the good times, these roles become well-integrated into how the organization does business; whether or not they were necessary at first, people start depending on that person for a task, their approvals become part of a critical workflow, they develop special institutional knowledge without which the institution won't function, etc. When the organization needs to shrink, the marginally-necessary roles all get laid off. Except now you have all these unfilled dependencies. Other remaining employees depend upon the now-gone employees to do their jobs. Communication processes break. People get demoralized as they realize the organization is broken anyway, and quiet-quit or start looking out for their own self-interest.
You run into Gall's Law in action: "A complex system that doesn't work cannot be patched up to make it work: you have to start over with a working simple system."
Lots and lots of things are going to break as fertility declines and the population shrinks. Education is going to be one of the first ones hit because it explicitly deals with young people, but likely this will go right up to capitalism and the state.