Financial support to college students and public and private colleges in Pennsylvania is described. The philosophy in Pennsylvania regarding the survival of private institutions is to provide money to the students, the consumers, and let them decide which institutions fit their basic needs and goals. Pennsylvania has established the Pennsylvania Higher Education Assistance Corporation, which puts $72 to $75 million a year into the student market as direct grants. About $68 million comes from the State Treasury, and the rest is made up of federal dollars and earnings. In addition, Pennsylvania has developed an Institutional Assistance Grant program. Pennsylvania takes the money made available by the legislature and divides it by the number of students who have received grants from private institutions. They then divide out the available money, up to $400 per student. Pennsylvania has also started to move back into direct aid to private institutions. Pennsylvania's system involves: a state-owned system that receives from the treasury virtually all of its money (14 colleges), state-related institutions that receive most of their funds from the state (three institutions), the community college system that receives one-third from tuition and one-third from a local sponsor, and private institutions that receive several million dollars from the state (13 institutions). A brief comparison to the situation in Massachusetts is made. Massachusetts provides need-based aid to students, and the law says that 75 percent of the state aid must go to students who attend private institutions. Massachusetts also allows students to take their money and go to a college in another state. (SW)