Financing private higher education and the possible means of relieving the chronic financial distress that has characterized private colleges over the past ten years or so have been the subjects of study by the Carnegie Commission, the National Commission on the Financing of Postsecondary Education, and the Association of American Colleges. In discussing and describing financial distress, these groups have in general compiled a catalog of specific events, which, taken together, are assumed to signal distress. Their work has not been directed toward providing analytical and empirical descriptions of financial distress; rather, it has been largely policy oriented, addressing such issues as the proper role of the federal government in financing private higher education and the question of whether distress in the private sector of higher -education ought to be alleviated by external agents. ' The purpose of this study is to address the problem of providing an analytical description of financial distress in private colleges that will serve as a basis for an empirical description by presenting a model of the financial condition of a private college and by using this model to find and test presently produced accounting measures that will describe financial distress empirically. More specifically, the study will undertake to answer the following questions: What model will analytically describe the financial operations of a private college in a way that allows for the separation of distressed condition behavior from