Financial and educational trends in accredited public institutions of higher education were studied for the period 1976-79 with some data for earlier years and for 1979-80. The study was based on a stratified sample of 135 institutions of which 95 participated. The sample represented all parts of the public sector except autonomous professional schools. Primary sources of information were the enrollment, salaries, and finance sections of the Higher Education General Information Survey; other salary information; and an audited financial statement, a voluntary support survey, and a questionnaire filled out by college officials and faculty and student representatives. In an analysis of the condition of the public sector, attention is directed to consolidated trends for all institutions, comparative trends for different types of institutions, and estimates of the overall condition of each participating institution. Broad areas of analysis are as follows: enrollment and admissions, faculty and other staff, content and quality of educational program, operating revenues and expenditures, undergraduate student financial aid, and liabilities and net revenues. It is concluded that although times are difficult, public institutions have been able to operate so that educational programs have not been harmed seriously and retrenchment has not been severe. It is suggested that this basic stability has been achieved at the expense of physical, financial, and human capital and through changes in budgetry priorities, and that if trends of the last decade continue indefinitely, a time will come when educational performance will deteriorate. (SW)