This report reviews the first five years of the Consortium for the Advancement of Private Education (CAPHE) during which it has assisted small liberal arts colleges in the United States. Questions concerning the condition of these colleges today are addressed, as well as CAPHE's ability to help them and make a difference in their viability and the quality of the education they offer. The report is based on information obtained over 9 months of interviews with 145 persons, including visits to 14 U.S. campuses. In addition to describing the CAPHE organization, mission, and progress, the report also discusses the role of the small liberal arts college in America. Major sections are devoted to the objectives of CAPHE grants and discussions of current challenges and future opportunities. Subjects discussed within these sections include: modern technology and the small liberal arts college; the attrition of students and marketing endeavors to overcome this shortage (including marketing efforts at historically black colleges); and the academic interest in two currently fashionable subjects: multicultural education and the teaching of values. Appendices include lists of CAPHE grant recipients, 1985-1989; donors to CAPHE, 1983-1989; and the trustees of CAPHE. (GLR)