The work of the Arizona Commission for Postsecondary Education (ACPE) is guided by a 5 year strategic plan. The purpose of the plan is to provide focus for the activity of this small agency and its eight staff members in order to increase productivity and impact in the areas of its statutory authority. The mission and goals were accepted by Commissioners in late 2004 and this report reflects the third year review of goals, performance, and outcomes as outlined in the plan. Through this planning process, the 16 Governor-appointed Commissioners identified an agency mission of expanding access and increasing success in postsecondary education for Arizonans. Three goals were named to achieve this mission: (1) increase available student financial resources, (2) implement strategies to help students and their families plan, enter, and succeed in postsecondary education, and (3) provide a forum for all sectors of higher education to dialogue, partner, and problem solve issues of mutual interest. A roster of the ACPE Commissioners follows on the next page. The work of the ACPE has been highly impacted by recent legislative action. The ACPE has been asked by the Arizona State Legislature to develop and implement two new student financial aid programs and to design a program to support foster youth and young adults in postsecondary education. The Postsecondary Education Grant (PEG) program was established in the 2006 Legislative session and the Early Graduation Scholarship Grant program was established in the 2007 Legislative session. The successful development and launch of these important student financial assistance programs has been the focus of both the Commissioners and the ACPE staff over the past eighteen months. The Foster Youth Postsecondary Education Case Manager Program is still being designed and a pilot program will be launched in early 2008. Progress on each of these legislatively directed initiatives is discussed in more detail within this report. The Arizona Commission for Postsecondary Education staff has identified efficient and effective administration of the financial assistance programs under their management as the primary strategy to achieve Goal 1. The second and third goals are supported through policy analysis and research, as well as by collaborative action led by ACPE task forces and participation in college access initiatives led by foundations, government, or non-profit entities with similar missions. The Arizona Commission for Postsecondary Education is a very lean agency. The strategies of efficient and effective administration and leveraging resources through collaboration and partnerships are born of necessity. In terms of human resources, the agency employs 8 FTE. Likewise, the agency uses minimal state financial resources. The FY 2007 ACPE annual budget was $9.6 M, of that amount $8.5 M was pass-through money dedicated to postsecondary education students in the form of financial aid. Moreover, the operational budget for the agency was $491,000 and more than half of this amount was supplied through administrative fees, and grants. In addition, the agency generates $191,000 in donations, sales, and grants to fund college-going programs and publications such as College Goal Sunday, the Arizona College and Career Guide, the Rapid Guide to Financial Aid, and the Arizona Minority Education Policy Analysis Center. This ACPE annual report is organized in three sections, each section describes the activities and services related to each of the three goals. The conclusion summarizes how the parts of this report relate to the plan and the future of the Commission. [For 2005-2006 Annual Report, see ED495371.]