The New Jersey annual report on higher education outlines achievements and problems within the system. Five sections focus on the following topics: (1) introduction; (2) system status report (size of the system, budget and finance, funding policies and formulas, faculty, state college autonomy, and overall academic health); (3) the foundations of excellence (the Governor's challenges, departmental grant programs, the 1984 Jobs, Science, and Technology Bond Act, and improving undergraduate education); (4) equity/access (transfer advisory board, minority enrollment initiatives, basic skills, affirmative action, and student assistance); and (5) special issues (assessment, Student Unit Record Enrollment system, health professions education policy, initiatives, and sector study commissions). Two appendices provide tables on finance, academics, admissions/enrollments, and faculty in New Jersey and on membership of the Advisory Board and groups. A map shows the locations of New Jersey colleges and universities. Twelve figures include information on total expenditures by New Jersey higher education by collegiate sector, statewide distribution of projects, and net tuition paid by tuition aid grant recipients. (SM)