The expansion of the junior and community college movement in the U.S. has created a significant problem for the traditional 4-year colleges and universities. A recent report indicates that there are more than 250,000 students seeking to continue their educations following completion of their junior college curricula, and 4-year colleges do not have the facilities to accommodate these additional students. Upper-level colleges and universities (institutions offering junior and senior year baccalaureate programs as well as programs leading to master's and doctoral degrees) are seen as one solution. This paper presents a brief history and reviews the advantages associated with upper-level colleges, describes how several of the institutions are capitalizing on the opportunities available for innovation, discusses how they are coping with the problems they are confronting, and offers some recommendations concerning the creation of upper-level colleges. (Author)