This document summarizes an empirical evaluation of the attributes of two alternative approaches to expanding public higher education in Texas: (1) expansion of existing senior institutions to meet projected enrollment for 1980, and (2) construction of new 4-year public institutions. The costs and benefits of higher education were estimated on a per student or per graduate basis, and were analyzed relative to both the individual and the State. Results indicate that the first alternative is cheaper but fails to encourage low income individuals to enroll in the system. A comparison of the effects of the alternatives on the State economy seems to indicate that (1) expected costs would be greater than the benefits, and (2) State tax revenues would not be significantly affected. (Author)