Pressures facing higher education institutions regarding accountability and the implications of their responses for accreditation agencies and state governments are discussed. Much of the response of institutions to current or anticipated declines in enrollments or financial resources is defensive and/or negative. Some institutions plan against retrenchment by seeking political relief from the financial effects of actual or projected enrollment declines. There is also a growing willingness in higher education to adopt market-oriented, entrepreneurial behavior in an effort to maintain enrollment. If higher education pursues survival in appropriate ways, it may undermine its ability to respond to legitimate demands, thus leading to further loss of credibility and autonomy. Specific suggestions for planning for retrenchment are offered. One implication of legislative program auditing for higher education is that auditing beyond mere fiscal review is increasing. The states increasingly will assert both their perceived right and their ability to examine the efficiency and effectiveness of higher education programs and policies. A critical issue is what the reaction of higher education will be to: (1) the increasing pressure to neglect quality in the short term for the sake of survival; and (2) the outside pressure on the institution to assess performance in ways that seriously distort the essential purposes of higher education. It is suggested that independent or private accreditation is the logical means of implementing self-regulation. (SW)