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This report presents the results of qualitative and quantitative analyses of how well the higher education system in Nevada will meet the challenges of the future of current trends and patterns continue. The report contains three parts that present the data analysis, the key issues the Nevada Board of Regents confronts, with possible responses to them, and action items to consider for next steps. Interviews were conducted with key System, business, legislative, and educational leaders in the state, and data were collected from various campuses and the Chancellor's office. Findings suggest that Nevada must make significant changes to meet its goals in the face of rapid population growth. The scenarios reviewed through computer models involve significant increases in spending and significant increases in the performance of existing institutions. It appears that meeting the significant challenges faced by higher education in Nevada through bold changes may in fact be less challenging than attempting to meet them with incremental changes to the current system. Recommendations center on: (1) quality and access; (2) efficiency and accountability; (3) development of an effective assessment of student learning; (4) finance reforms; (5) separation of the funding of research and instruction; (6) refinement of the funding formula; (7) reevaluation of the fee setting structure; (8) changes in student financial aid policies; and (9) establishment of as simple a system of governance as possible. Appendixes describe development of a value-added measurement of undergraduate education, goals and criteria for evaluation, the data and computer simulation methodology of this study. (Contains 1 table and 13 figures.) (SLD)