This paper reviews two different issues of current concern to educational planners and policy makers involved in the costing and financing of education. Part 1, by Mats Hultin, highlights the financial impossibility of continuing upward trends in educational costs. It does so by presenting the theoretical case of a country affected by the problems of rapidly rising enrollments and unit costs, an increasing share of public expenditure claimed by education, and the government's inability to devise an alternative strategy acceptable to all segments of the population. The data base corresponds to typical situations among developing nations. Part 2, by Jean-Pierre Jallade, digs into the issue of education and income distribution. It argues that, contrary to the views held by many social reformers, there is little chance that education per se is an adequate policy tool to achieve a more equitable distribution of income. The point is made that education may be conducive toward greater equity only if policies concerning the pricing, financing, and taxing of education are actually geared towards this goal. The conclusion of the paper stresses the importance of educational finance policies in a development strategy aiming at using education to promote equity. (Author)