In response to concerns about the loss of effectiveness of the community college transfer function, this paper examines the steady decline in rates of minority student transfer from two- to four-year colleges and offers policy recommendations for facilitating transfer and baccalaureate degree attainment. Initial sections review data showing the disproportionately high enrollment of minority college students in community colleges; trends in race and ethnicity in the U.S. population composition; racial and ethnic differences by age and region; and the decline of the transfer function and the rise of vocational curricula at community colleges during the 1960s and 1970s. Next, rates of high school completion, college entrance, and college graduation are examined to illustrate the progress of minorities as they flow through the educational pipeline. Several descriptive and theoretical studies of minority student participation in community colleges are then reviewed, focusing on students' aspirations and findings specific to Hispanic, American Indian, and Black students. The final sections suggest alternative solutions that can promote baccalaureate attainment, including the creation of academic colleges to provide lower-division curricula, the establishment of transfer colleges within community colleges, grants and scholarships for minority transfers, state transfer student monitoring systems, special institutional initiatives, and academic partnership programs. (34 references are included.) (AJL)