Difficulties facing private colleges and universities in the future are considered, with attention to the situation in North Carolina. An important determinant of the future of independent higher education will be public policy. Three major considerations include: private colleges and universities are public resources and serve a predominantly public function; to the extent that private institutions educate citizens of the state, they save the taxpayers money; and it is questionable public policy to expand state-supported institutions while private college facilities lie underutilized. Of primary concern to elected and appointed state officials is the impact of the rapid shift of in-state resident enrollment since the mid-1960s. Data on enrollment trends in North Carolina are presented as illustration of the decline in the percentage of undergraduates attending private colleges and universities. This change in student choice has resulted in the need for additional facilities and increased operating costs for the state. According to studies, a primary reason students choose public over private colleges is the tuition differential. However, it is suggested that the increased tuition differential between the two sectors has not been as great as has been the increased subsidy to students attending the public sector. It is proposed that a comprehensive scholarship program based on student need be combined with a tuition offset program (addressed to the differential between the two sectors). This proposal is designed to allow students greater choice in selecting a college. (SW)