Federal action that has influenced, either directly or indirectly, the curriculum of higher education is examined. The purpose is to better comprehend the process by which educational policy decisions are reached by the government and what institutions of higher education have to do with this process. A review of recent federal funding programs in relation to degree expectation by field and level (in 1975-76 and projected to 1985-86) shows a positive correlation between fields receiving significant federal support and tendency of students to choose those fields, as well as a decline in students majoring in selected fields that lack federal support. It is noted that the federal government is increasingly considered the major spur to educational innovation, although funding levels for innovation in nonscientific fields and for encouraging institutional diversity are extremely low. A result has been the compelling vocational thrust of the contemporary undergraduate curriculum in private and public institutions, and, unintentionally, a decline in general education. Several recommendations are offered, including that: (1) there is a need for federal policy initiatives to be developed regarding the impact of federal funding on college and university curricula, and (2) institutions of higher education should evaluate whether they are relying too heavily on federal initiatives to define their educational mission. (Author/MSE)