This study describes the actions taken by public institutions of higher education over the last several years to respond to severe financial pressures. It is based on the responses of 296 public colleges and universities to 24 questions included in the 1994 Campus Trends survey that were relevant to actions taken in expenditure control, new sources of revenue, reorganization, and selective decisions about academic programs. The study found that, over the last several years, most (two-thirds or more) public-sector institutions have tightened expenditure controls, taken steps to develop new sources of revenue, undergone administrative and academic restructuring, and made "hard" decisions about prioritizing and cutting specific academic programs. Differences in approach by institution type (research universities, doctorate-granting institutions, comprehensive universities and colleges, and community colleges) are also explored. The study documents a substantial level of activity among public colleges and universities to redirect their operations and programs. This, in turn, suggests that many institutional administrators have become convinced that serious changes are necessary and that their current financial problems are neither temporary nor limited in impact. (Contains 13 references.) (MDM)