There is widespread interest in restructuring state systems of higher education, with special focus on the role of private colleges and universities. This report considers this issue from 6 perspectives; (1) a description of conventional relationships between state systems and private sectors in higher education which suggest the need for restructured state systems; (2) a classification and description of existing and proposed types of state support required to implement a typically restructured system and promote balanced development of public and private institutions; (3) a consideration of some of the basic arguments advanced as a general case for restructured systems; (4) an examination of the major legal and political issues affecting federal and state aid for private institutions, including state coordination of private institutions; (5) a review of current trends which illustrate the variety of approaches to state support programs now in process or under consideration; (6) an evaluation of the major features of these perspectives relative to the problems which the Southern region would encounter in adapting the state support approach to state goals for higher education. (AF)