Federal involvement in higher education and the legislative and political history of this involvement are reviewed. It is shown that there is no single federal policy towards basic research, scholarship, and graduate education. The result of changes in policy of a number of agencies can be financial and programmatic uncertainty. Federal activity in higher education is reviewed in terms of: payments to students, payments to institutions, payments to states, and regulatory activities. The analysis emphasizes the treatment and response of the private and public sectors. While the federal government is neutral towards these sectors, the consequences of particular choices among policy alternatives may favor one sector over another. The following legislation is considered: the Morrill Acts of 1862 and 1890, the G.I. Bill, the National Defense Education Act of 1958, the Higher Education Facilities Act of 1963, the Higher Education Act of 1965, and the Education Amendments of 1972 and 1976. A case study on the Education Amendments of 1972 emphasizes the interplay of institutions, personalities, and policies. It is suggested that in the most general terms the Education Amendments of 1972 completed the transformation of higher education into a mass phenomenon in the United States. A list of major factors influencing federal education legislation, based upon opinions of Robert C. Andringa and other Congressional staff, is appended. (SW)