This report summarizes evidence of a decline in government financial aid to students attending independent colleges and universities that have made contributions to the state by providing the state economy with competent professionals, and by offering educational opportunity to members of ethnic minorities. However, a state policy commitment to these institutions has been eroded by inflation and budget competition. Six criteria for alternative private sector resources are that they must recognize the limits on family, college and student resources in meeting tuition; that they must further enhance the opportunities for low income and minority students; that selection of students should be based on merit; that there should be reciprocity with donors through recognition of their gifts; that initiatives should build on the educational strengths and autonomy of these institutions; and that the effort should clearly be feasible. In applying these criteria the report develops three models: (1) an annual coordinated state-wide collective fundraising campaign for aid to students; (2) a statewide scholarship program based on merit; and (3) an information and management service to monitor the program's effectiveness. Four tables are included; the appendixes provide descriptions of 11 additional alternatives and 8 model programs.