A discussion of the economics of higher education begins with an outline of the history of higher education, and a profile of American postsecondary institutions in the recent past and the present. An analysis of the outlook for enrollments follows. Data are given on enrollment trends since 1951, according to sector (public versus private), institution type, and degree level and subject area. Demographic profiles illustrate a forecast of enrollment trends through 2,000. The geographic distributionof the traditional college-age population is outlined, and graduate and professional education populations are also discussed. Financial data on recent funding and funding trends in private and public institutions and on faculty illustrate a discussion of revenue and fiscal capacity, especially as they are affected by the federal government. It is concluded that increasingly intense competition for students will be important in higher education economics in the 1980s, and there will be continuing efforts to economize. The intellectual vitality of the faculty is seen as important to the health of higher education, though the demand for new, younger faculty members is foreseen to be very small in the near future. Appended are a list of references and suggestions for further reading. (MSE)