A new issue of public policy in America's higher education history is the state support of private higher education. As of January 1, 1980, all of the states except Wyoming and Nevada provide some type of aid to private higher education institutions.

One state, North Carolina, began its efforts to provide state assistance to private higher education in 1971 and by 1981 had provided approximately 86 million dollars to its now 38 private colleges and universities. This study is an in depth description of (1) the current status of that aid; (2) the political evolution of that aid; (3) the several different interest groups and individuals involved with (a) the legislation authorizing the aid and (b) the subsequent litigation contesting the legislation; and (4) the issue of state aid to private higher education in a national context.

Currently, there are three general programs of state aid to private higher education in North Carolina: (1) the North Carolina State Contractual Scholarship Fund, (2) the North Carolina Legislative Tuition Grant Program and (3) the North Carolina Student Incentive Grant Program. The North Carolina statutes authorizing these programs of aid were held to be constitutional under the Establishment Clause of the First Amendment to the United States Constitution in Smith v. Board of Governors of the University of North Carolina (1977).

Those actors responsible for the legislation authorizing the programs of aid include former Governors Bob Scott, Dan Moore, and Jim Holshouser; Governor Jim Hunt; former and present legislators favoring aid to private higher education; the trustees, staff, faculty, and students of private higher education institutions; parents of students attending those institutions; representatives of the (now defunct) State Board of Higher Education; and representatives of the North Carolina Association of Independent Colleges and Universities. Those actors who are considered the primary forces behind the legislation are Duke University President Terry Sanford (former North Carolina Governor), Pfeiffer College President Cameron West (former Director of the State Board of Higher Education), Ben Fisher (former Executive Secretary for the Council on Christian Higher Education of the Baptist State Convention of North Carolina), Virgil McBride (former Executive Director of the North Carolina Association of Independent Colleges and Universities), and John Henley (current President of the North Carolina Association of Independent Colleges and Universities).

Proponents of the aid postulate that such aid is economical, i.e., the State saves money by utilizing available space at private institutions. They also posit that the aid provides access to and choice of higher education for North Carolina students. They are quite adamant in their belief that the aid is student aid, not institutional aid, although the funds are allocated directly to the institutions.

For this study, the researcher utilized newspaper files, official reports, legal documents, letters, memoranda, related literature, House and Senate Journals, and Session Laws. Fifty interviews with principal actors were conducted.