The economic impact of resident and nonresident students attending Arizona universities during the 1981-1982 academic year was studied, along with the cost of education compared to economic benefits to the state created by nonresident students. Expenditures were classified as direct out-of-pocket expenditures by students, direct expenditures by the three Arizona universities for the cost of education of students, and induced expenditures, or those that result for the respending of direct expenditures. Findings include the following: students (including out-of-state visitors) expended an estimated $334.4 million in direct funds exclusive of tuition and fee payments; Arizona resident students expended an estimated $235.8 million or 70.5 percent of these direct funds in 1981-1982; nonresident students (including their out-of-state visitors) expended an estimated $98.5 million or 29.5 percent of these direct funds; the average full-time-equivalent (FTE) resident student expended $4,619 in direct funds, while the comparable figure for FTE nonresident student and visitors was $6,317. Information is also presented on state taxes generated by nonresident students, jobs created by nonresident students, state subsidy for nonresident students, and fixed and variables costs for nonresident students. (SW)