[Excerpt] This paper has demonstrated that doctorate-producing universities respond to changes in the number of FTSEG students supported on external funds by altering the number of FTSEG students that they support on institutional funds. While institutional adjustment to changes in external support levels appears to be quite rapid, in the aggregate the magnitude of these responses is quite small. A increase of 100 in the number of FTSEG students supported by external funds is estimated to reduce the number supported on institutional funds by 22 to 23. Since some of the institutional funds that are "saved" may be redirected to support graduate students in the humanities and other fields not represented in the data, the total effect of such a policy change on institutional support for graduate students is probably somewhat smaller.