This essay discusses the financial problems faced by higher education institutions in the United States and advances possible solutions to these difficulties. Colleges and universities in the 1990s are confronted with internal desires to expand services and programs, an absence of productivity gains, increasing costs for information and technology, and decreasing state and federal financial support. These constraints have created a period of austerity which has lead to sharp hikes in tuition at public universities, enrollment caps, and class and program cancellations. Policy issues that need to be addressed include: (1) who should receive higher education; (2) who should pay for higher education; and (3) what role should state and federal support play. Institutional solutions focus on making do with less, doing the same with less, changing the educational delivery system, and sharpening and differentiating institutional missions. State options include high tuition, high student aid policies for state institutions, increased budgetary efficiency, and decentralization. Federal options include student loan reform, national service programs, and commitment to data collection, while philanthropic options include support for institutional studies, leadership and policy studies, and constructive criticism of institutional and government policies. (MDM)