This report discusses the constitutionality of state aid to church-related institutions of higher education. The introduction deals with the important role that private institutions play in the total system of higher education, the seriousness of their financial plight, and the necessity for increased state aid to these institutions. Sections 2 and 3 respectively deal with the position of the Federal Constitution and the Texas Constitution on federal and state aid to church-supported institutions. The next 2 sections deal with the constitutionality of state aid to church-supported institutions in terms of student support and institutional support. The conclusion is reached that on both the federal and state constitutional level, the federal and state governments may, without committing constitutional error, give some support to church-related colleges and universities either by way of incidental or indirect benefits or by subsidizing aspects of education and the educational process of a secular nature. (AF)