The current federal relationship to higher education and the historical underpinnings of this relationship are examined, along with a statistical profile of the federal fiscal impact on higher education. After sketching the historical division of responsibilities for education in the U.S. federal system, attention is directed to the central features of current debates over student aid, research support, tax policies, regulation, data collection and analysis, and the role of the Secretary of Education. Speculations on the outlook for higher education in the post-Reagan era are also offered. Data are provided on estimated federal financial assistance to higher education for student aid, research and development (R&D), and other institutional support with breakdowns for specific types of aid. The legislative history of student aid is considered, along with trends and issues in the 1980s. Included are data on: aid awarded to postsecondary students by type of aid program for 1980-81 and 1986-87, and a comparison of estimated financial aid for students enrolled for advanced degrees by program (federal, state, institutional sources, and private sources) for 1974 and 1984. Additional data covers R&D expenditures at universities and colleges by source of funds for fiscal years 1980 and 1985. (SW)