current educational purposes from each of these sources in 1937-38, the latest year for which data have been published, was in the following proportions: (1) income on invested funds or endowment, 13.5 per cent; (2) gifts and grants from individuals, churches, and philanthropic agencies, 7.0 per cent; (3) fees paid by students, 34.3 per cent; and (4) governmental appropriations, 36.9 per cent. The remaining 8.3 per cent consists of miscellaneous items, most of which could probably have been classified originally under one of the four major categories. Some institutions, for example, report an income from the profits on their auxiliary activities, such as residence halls, dining rooms, and book stores, although most colleges and universities operate such facilities at cost or even at a deficit; where a profit results from such enterprises, it is obviously an income from students. A small number of institutions operate directly certain commercial enterprises, other than those serving students, which produce a true net income that can be used for educational purposes. Only a few institutions engage in profit-making enterprises of this sort, and the total revenue from this source is too small to be separately reported in the national totals at present. The income from these entrepreneurial activities, however, would constitute a distinct category among the forms of financial support for higher education. Besides the income needed for current support, higher education must have funds for capital purposes, especially to take care of the development of plant facilities. No records are available to show accurately the sources from which have been accumulated the c pital funds at present tied up in phy ical plants, endowments, and other permanent forms. Without doubt, however, the great bulk of the capital funds held by institutions of higher education today has been derived from philanthropic gifts and governmental appropriations. The evidence seems clear that higher education faces the probability of considerable expansion in the postwar period.' Perhaps the chief limiting factor in this expansion will be its financing. It is important, therefore, to analyze each of the sources from which higher education receives support, to note the extent to which contributions may be expected toward the additional income that will be needed for both current and capital purposes in the postwar period.