The role of the federal government in higher education in the United States is considered in an address to the Organisation for Economic Cooperation and Development. The federal government is reducing expenditures in education and seeking to limit the government's involvement in developing education policy. The federal support for higher education has been primarily through assistance to students and not directly to institutions. The decline in the number of 5- to 21-year-olds and the increase in the number of adult students has shifted the focus of the pressure for governmental funding. The community and junior colleges were designed for and grew from community need, the demands of business and industry, and the needs of the nontraditional student, and they currently enroll more than 35 percent of the total enrollment in postsecondary education. Community and junior colleges receive considerable financial support from state and local governments. Another sector of higher education discussed is the private college, which educates a large percentage of the liberal arts graduates and which faces a struggle for survival in the future. Throughout the United States there is a renewed emphasis on the need for quality in education at all levels. A National Commission on Excellence in Education has been established and, among other things, it will assess what higher education can do to counteract poor preparation of college students in basic and advanced learning skills. Additionally, there is a need to train specialists in such fields as computer science, optics, engineering, and some physics and chemistry areas. Additional perspectives on financing higher education during the 1980s are considered. (SW)