This report, one of a series on Changing Patterns of Finance in Higher Education, examines important changes in the funding for higher education in England during the 1970s and 1980s. Until the early 1970s, English universities were funded by quinquennial grants from the government through the University Grants Committee; the public sector institutions were funded by the Advanced Further Education Pool. In the early '70s, due to England's economic problems and a decrease in the demand for higher education, these funding bodies collapsed. There followed a public debate about student financial support, whether institutional income should depend in large part on fees, and whether student support should be in grants or loans. In the summer of 1988 the Education Reform Act passed with four provisions which changed the funding mechanisms to make the universities and other institutions more accountable to their funding bodies through the operation of market and quasi-market mechanisms. The reaction of the universities to these proposed changes has been almost universally suspicious, while the public sector institutions have welcomed them. Issues for the 1990s include a proposed loan scheme for students entering higher education, reforms in research funding, and a downward demographic trend. (JB)