This report provides contextual background for the Missouri Commission on the Affordability of Higher Education, which was established in 1998 to engage students, parents, business, higher education, and public policy leaders in a systematic dialogue aimed at ensuring that an affordable college education stays within reach of Missouri citizens. The report addresses primarily the price of undergraduate education, i.e., tuition and fees full-time undergraduate Missouri residents pay to attend college. An overview of Missouri's System of Higher Education is first presented, followed by observations on the economics and financing of higher education, including the changing role of tuition and fees, appropriations, cost of living, and per capita disposable income. Overall, the price of higher education as a percent of Missouri per capita disposable income increased from 1989 to 1997. The report also covers the role of student financial aid, noting that although the total amount available has increased in recent years, much of the aid awarded by institutions is based on merit and ability rather than financial need. Further, in recent years, the total amount in student loans has increased significantly as well. The report also presents the challenge to the states by the National Commission on the Cost of Higher Education, and a discussion of the Missouri Coordinating Board for Higher Education Initiatives and Policies Affecting Affordability. (JJL)