The degree to which cooperative education is a viable educational and/or financial aid mechanism for institutions of higher education to adopt is examined in this research report. A postsecondary co-op program is defined as one in which the institution takes primary responsibility for providing the student with a series of experiences in which academic and on-the-job learning is integrated. This study also determined the effectiveness of the federal role in supporting cooperative education through Title IV-D of the Higher Education Act. Four segments of the program include: (1) an examination of the costs and benefits of cooperative education for the three key sets of participants--the student, employer, and institution; (2) a determination of the degree to which cooperative education is a viable career education mechanism; (3) an assessment of the national potential for the expansion of cooperative education in postsecondary institutions; and (4) as assessment of the federal role in promoting the growth of postsecondary cooperative programs. Program and policy implications are also addressed. (LBH)