This book's purpose is to show .how assessment can be used to enhance the educational and research functions of colleges and universities by promoting talent development among both students and faculty members. Chapters cover the following topics: (1) review of traditional uses of student assessment; (2) the input-environment-outcome model which shows how assessment information can be effectively used in decision making; (3) different aspects of the model; (4) ways of analyzing assessment data; (5) how assessment results can be used; (6) practical, technical, and political problems associated with building an adequate database of student data; (7) how assessment can be used to affect the learning process directly among both students and faculty; (8) use of assessment to limit educational opportunity and its potential uses to enhance and expand opportunity; (9) the assessment "movement" in various states; and (10) consideration of various future directions that assessment in American higher education might take. An appendix reviews fundamental statistical concepts and considers statistical and analytical concepts needed to apply the input-environment-outcome model in practice. Includes over 150 references. (JDD)