THE ACADEMIC COMMUNITY HAS BECOME A PART OF PUBLIC AFFAIRS, CONTRIBUTING TO NEW TECHNOLOGY IN GOVERNMENT, ADVISING STATE AND LOCAL GOVERNMENTAL OFFICIALS, BUTTRESSING GOVERNMENTAL STAFFS, AND AIDING IN THE FORMULATION AND EXPRESSION OF PUBLIC POLICY. PAST AND FUTURE PREDICTED TRENDS IN RESEARCH, ECONOMIC GROWTH, AND FINANCE, AS THEY RELATE TO CURRENT OR PREDICTED PROBLEMS IN EDUCATION, ARE DISCUSSED, ESPECIALLY AS THEY CONCERN STATE AND LOCAL GOVERNMENTS. RESEARCH EXPENDITURES BY COLLEGES AND UNIVERSITIES HAVE RISEN FROM LESS THAN $50 MILLION PRIOR TO WORLD WAR II TO $2.1 BILLION IN 1965, AND THEY ARE EXPECTED TO REACH $4 BILLION BY 1970. THE IMPORTANCE OF INVESTMENT IN PEOPLE'S EDUCATION AS A SOURCE OF ECONOMIC GROWTH HAS BECOME APPARENT THROUGH ECONOMIC RESEARCH. THE GROWTH OF ENROLLMENT IN HIGHER EDUCATION TO 7.7 MILLION STUDENTS BY 1970 AND THE INCREASED EXPENDITURES WILL CREATE ADDITIONAL PRESSURES ON THE ALREADY HIGH STATE AND LOCAL EXPENDITURES (68 PERCENT OF THE TOTAL SPENT ON HIGHER EDUCATION, OR $1.2 BILLION.) THIS PAPER WAS PRESENTED AT THE COLLEGE SCHOLARSHIP SERVICE COLLOQUIUM ON FINANCIAL AID (3D, FONTANA, WISCONSIN, MAY 22-25, 1966) AND THE COMPLETE DOCUMENT, OF WHICH THIS IS ONE PAPER, "THE ECONOMICS OF HIGHER EDUCATION," IS AVAILABLE FOR $2.00 FROM THE COLLEGE ENTRANCE EXAMINATION BOARD, PUBLICATIONS ORDER OFFICE, BOX 592, PRINCETON, NEW JERSEY 08540. (HW)