This report discusses the current state of higher education, with a brief high-level overview of the market and a more detailed discussion and analysis of the financial aid system. It also discusses the important changes President Obama has made to make higher education more accessible and affordable. The key findings are: (1) The economic returns to higher education remain high and provide a pathway for individual economic mobility; (2) Public colleges educate the vast majority of the nation's students enrolled in institutions of higher education, but private, for-profit schools are growing the most rapidly; (3) Historically, society provided a significant subsidy to young people through the widespread availability of inexpensive public higher education. However, over the past several decades, there has been a substantial shift in the overall funding of higher education from state assistance, in the forms of grants and subsidies, to increased tuition borne by students; (4) The Obama Administration has offset some of those increased costs with recent increases in educational support through increased Pell grants and the American Opportunity Tax Credit; and (5) The combination of decreased state subsidies for higher education and increased federal spending on financial aid represents a shift in the responsibility for paying for college toward a greater onus on students, families, and the federal government. This report is divided into four sections. The first section provides a broad overview of the basic characteristics of the market for higher education. The report then discusses the impact of higher education on individual earnings and economic mobility. The next section focuses on cost and access to higher education, including the difference between posted and net tuition. The final section considers the financial aid system and other federal policies related to higher education. The following are appended: (1) Expected Family Contributions; and (2) Distribution of Campus-Based Aid to Schools.