In its annual report for the 1977-78 fiscal year, the Alabama Commission on Higher Education summarizes the activities of the Commission and discusses the status of higher education in the State of Alabama. Major trends noted in this report include: an overall increase in state funding for higher education, an increase in funds appropriated for first professional health education, and a significant decrease in the number of humanities and liberal arts degrees awarded. Topics covered in the report include: (1) academic programs; (2) appropriations for higher education; (3) college and university information systems; (4) operating budget of the Commission; (5) federal programs; (6) special studies by the Commission; (7) student assistance programs; and (8) the evaluation committee. A map of institutional locations and lists of higher education institutions in the State of Alabama are appended. (BH)