The influence of enrollment growth and inflation on the costs of North Carolina's comprehensive and liberal arts colleges and universities were studied. comprehensive institutions were defined as those having more than 1,500 students, a liberal arts program, and at least one professional program; liberal arts colleges, as four-year colleges with liberal arts programs only. Of the 41 comprehensive and liberal arts colleges in North Carolina, 39 public and private colleges were studied. Data were obtained from the Higher Education General Information Survey (HEGIS). Fall semester full-time-equivalent enrollments for each institution and The Consumer Price Index for each fiscal year were also analyzed. For the past decade, it was found that public institution expenditures grew at an average annual rate of 13.3 percent, compared to 8.7 percent for private institutions. After adjusting for increasing enrollment growth by expressing expenditures in student units, the growth rate was 7.8 percent per annum for the public and 7.1 percent for the private sector. After adjustments for enrollment growth and the decline of the value of the dollar, the current expenditures annual growth rate was only .3 percent for public, and -.4 percent for private institutions. Public institution enrollment increased more rapidly, and public institutions operated at a consistently lower cost per student. (SW)