Methodology for estimating the cost of higher education and the student's ability to pay. Comparisons of the ability and cost factors provide estimates of the percentage of potential students who are effectively "priced out" of higher education. Actual data from the public higher education system of Texas are used. Major sources of financial support reported by college freshmen responding to the college student questionnaire are investigated to permit the approximation of the lognormal distribution function for "expected contribution." These data are combined with cost data relevant to the analysis of policy decisions in higher education. The approach can be used by public or private institutions to study proposed changes in tuition or scholarship policies. The techniques can also be applied to the analysis of the problem of whether to expand existing physical facilities to provide for growing enrollments, or establish new institutions in heavily populated urban centers. 17 pp.