Trends toward increasing federal involvement in higher education and the potential for additional federal mandated reporting are discussed. Areas where the relationship with the federal government has aided institutions are noted, as well as the possibility of harm to innovation and creativity. Historical developments in which government became involved in higher education include: an unsuccessful attempt by the New Hampshire state government to take control of Dartmouth College in 1819, land-grant college legislation (the Morrill Act of 1862) federally-sponsored research in agriculture and later defense-related fields coordinated by the National Research Council (NRC) established in 1916, provisions of the New Deal, veterans' education benefits (the G.I. Bill), the anti-Communist movement, the federal response to Sputnik (the National Defense Education Act of 1958), and incremental growth in appropriations to higher education from 1970 to 1994. The paper notes that federal aid to higher education has resulted in accountability for funds, and resources which could improve quality are diverted to greater administrative oversight to ensure compliance. A partial list of legislative acts illustrates the size and complexity of federal regulations over higher education. Court litigation and controversies between the federal government and higher education are also considered. Restoring public confidence in higher education through institutional assessment is identified as the primary vehicle available to prevent federal control, and to save any future form of self-regulation. (Contains 54 references.) (SW)