This analysis critically examines the cost controversy in higher education with an eye to resolving the crisis which is currently serving to exacerbate public willingness to fund higher education. An introduction touches on the role and influence of political ideologies and offers a framework to be used throughout the analysis for critically examining ideological claims regarding the cost controversy. A section on the role of federal financing strategies and their contribution to the cost controversy looks at the federal role in pricing, promoting productivity, and the concept of student aid as investment. A section on state financial strategies also looks at pricing, improving productivity and investment, and assesses various ideological claims about state issues. A section on institutional financing strategies reviews institutional perspectives, understanding price changes and productivity, the investment view, and ideological claims. A section on understanding financial strategy presents a reconstruction of the models typically used to assess financial strategies in higher education by first critically examining four common theories and then proposing a reconstructed model for assessing financial strategy. A final section uses the reconstructed framework to assess a range of approaches that federal and state governments and institutions could use. An index is included. (Contains over 250 references.) (JB)