At the University of Pennsylvania's annual career fair, held on Sept. 16, 2008, things seemed pretty normal; blue-chip companies like Citigroup, J.P. Morgan, Barclays and the Federal Reserve Bank of New York had come to woo a bumper crop of undergraduates from the prestigious Wharton School. As business cards flashed, a tremor went through the crowd: Where was Lehman Brothers? The 158-year-old financial giant had gone belly up two days prior—leaving the U.S. financial markets in free-fall and its designated folding table in Penn's Benjamin Franklin Ballroom conspicuously empty.

Among the many questions generated by the collapsing economy is: What happens when students like David Brooks' "Organization Kid"—bright, driven, even a little ruthless—find themselves without an organization in which they can excel or to which they can conform? The troubles in corporate America have forced a realignment of expectations among America's best and brightest young minds, and the work they choose, or are forced into, in this low hour may prove to be, as President-elect Barack Obama is fond of saying, "the change we need."

The shocking news that the U.S. economy shed 533,000 jobs in November, the largest amount of job losses in 34 years, has done little to assuage the fears of students preparing to leave school in the midst of one of the most pronounced economic downturns in modern memory. Job losses are piling up in the public and private sectors for white-collar workers and those in the service, construction and manufacturing trades. Firms are cutting jobs as well as hours for surviving employees. And, on campus, the prospect of glamour positions at the big banks and consulting firms have all but disappeared, as companies merge, melt or institute across-the-board hiring freezes.

"It just seems like everyone is panicking," says Kate Bennet, a pre-med senior at Princeton University. Bennet says she has friends who have applied for more than 60 jobs, with graduation still five months away. "So many people were planning on doing investment banking and kind of don't know what to do now." Last fall, at job fairs across the Ivies, chaos reigned: Barclays hastily took over Lehman's recruiting efforts at Yale, and at the Massachusetts Institute of Technology, Lehman, Bank of America and Goldman Sachs were all no-shows. At Penn, a "Career Link" handout encouraged students to project "a professional and positive attitude" and "be yourself!" But in the current climate, even the most savvy and prepared young job seekers could find themselves out of luck.

"Obviously we are encouraging our students to be more flexible," says Barbara Hewitt, senior associate director of career services at Wharton. Firms are not hiring the way they once did, but for students who have their heart set on a job in the world of finance, Hewitt suggests that they look at smaller cities or "affiliated industries" to find one. "The entry-level positions have been the first to go," says Rebecca Lee, a career counselor at Amherst College. "We're really coaching [students] on expanding their job search and broadening their thinking about what is possible for them."

Graduate school is now a popular option for the classes of 2009 and 2010. Aspiring doctors who had planned to defer medical-school admission are now applying immediately—not having the luxury of months or years of soul-searching nomadism. Bob Richard, a career counselor at MIT, says he expects graduate-school enrollment to go up. Law-school application numbers are already increasing at half a dozen other schools, and, says Hewitt, students who have put off a master's degree may "decide to do that sooner rather than later."