The report addresses the problems being faced by the state of Alabama's postsecondary educational system during the current recessionary period, and to be expected in the years ahead, and makes recommendations on how these financial burdens can be dealt with while simultaneously increasing educational quality. The report explains that Alabama's postsecondary educational system has grown too large to be adequately supported during economic downturns. The following recommendations are made: (1) Alabama's Commission on Higher Education must focus its public information program on key issues facing Alabama's higher education; (2) the Commission should connect planning and budgeting and involve leaders in education and government in the planning process; (3) the Commission should continue to develop multiple measures as the basis for institutional accountability; (4) the budgeting process should be linked more directly to support state priorities; (5) the Commission should have more authority over the review and possible termination of existing programs not meeting state needs; and (6) the state should provide more student grant aid. Study methods, findings, and the context for evaluation are presented, as well as appendices that include a list of the persons interviewed for the study and a transcript of the legislation specifying the functions of the Alabama Commission on Higher Education. (GLR)