This third report in a congressionally mandated study focuses solely on the issue of direct instructional expenditures and the factors associated with the comparative magnitude of these expenditures are 4-year colleges and universities in the United States. The data source is multiple cycles of the Delaware Study of Instructional Costs and Productivity (Delaware Study). Begun in 1992 at the University of Delaware, the study has grown into a national data-sharing consortium that embraces more than 300 4- year colleges and universities. Data from 1998, 2000, and 2001 were collected using an established survey instrument. The key finding from the analysis of multiple years of data is that most of the variance in instructional cost across institutions, as measured by direct expense per student per student credit hour taught, is associated with the disciplinary mix within an institution. A secondary factor affecting cost is institutional mission as related to Carnegie institutional classification, but this accounts for less of the ‘cost differential between institutions than the disciplinary mix factor. Findings underscore that the disciplines that compose a college or university’s curriculum, not the Carnegie designation, are associated with most of the dispersion of costs among institutions. It is evident from this study that the factors that are associated with instructional costs are very different from the factors associated with tuition prices. Five appendixes describe the Delaware study and its instruments and present supplemental data tables. (Contains 23 tables, 3 figures, and 15 references.).