The American system of financing higher education is highly complex and has long included low tuition, unrestricted appropriations and gifts to institutions, and the use of grants to finance students. Proposals are now being made to raise tuition drastically as one way of meeting increasing costs. This would be a tragic step at a time when efforts are being made to extend the benefits of higher education to millions who were previously excluded. Considerable public agreement exists on the aims of higher education which include universal access to as much higher education as students can handle; the existence of a great variety of institutions and programs; freedom from financial constraints in choosing institutions; academic freedom; efficiency and equity in allocating the costs of higher education; a balanced public budget; and the advancement of civilization. Different emphases will demand different patterns of financing. In general, however, the system of financing should veer toward the free public education model; student aid should be in the form of grants, and should be administered outside the institution. Institutional support should come from a variety of sources and include substantial unrestricted income. Private institutions should receive public funds to keep tuition down. (AF)