Problems, issues, and the potential of higher education were discussed at SREB's 26th Legislative Work Conference. Higher education's dilemma is that a steady state will bring increased pressures for change, not for operating on the basis of more of the same. Topics in the report include: highlights of a profile of higher education in the South, 1985; new assumptions for higher education: (1) from the state higher education agency, by Kenneth Ashworth; (2) from the legislature, by Lucille Maurer; and (3) from the university, by Frank Newman; higher education cost realities by both John D. Millet and Frank A. Schmidtlein; a perspective on education and employment in the South, by E. F. Schietinger; regional manpower outlook, by Eva C. Galambos; career planning at colleges and universities, by Anne Seawell; education as a state priority, by Ralph D. Turlington; and views on collective bargaining, by John R. Silber and Robert D. Nielsen. (LBH)