A report on the condition of the independent sector of American higher education systematically analyzes the fiscal condition of these institutions in terms of their ability to maintain the integrity and quality of their programs. The report is based on information gathered from a representative sample of 135 independent, non-profit, accredited institutions, including two-year colleges and research universities, but not autonomous professional schools. The question addressed is: In what ways are independent colleges and universities gaining ground, holding their own, or losing ground? Some of the topics discussed in this context are: enrollment and admissions; faculty and other staff; content and quality of educational programs; operating revenues and expenditures; undergraduate student financial aid, including an analysis of the impact of financial aid payments upon the fiscal condition of the independent sector; assets, liabilities, and net worth; financial ratios; the condition of institutions individually; and observations on retrenchment and quality. The statistical information and analyses are carried through the year 1976-77 and for some data through 1977-78, with much of this data organized in tables. Additional tables are included in the first appendix. "Definitions of Financial Terms" and "Institutional Financial Position and Methodology in the Appraisal of Progress" are also appended. (JMD)