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Concern over rising costs of financing higher education and an overall decline in the public’s trust have created new demands for colleges and universities to demonstrate their productivity. Our study focuses primarily on the interplay between states’ economic contexts and their patterns of revenue support for higher education and their resulting impact on growth in graduation rates among public institutions in the United States. Our primary analyses concern defining a series of two-level models examining how changes in state higher education appropriations are related to changes in state proportion of family costs and, in turn, how they affect growth in graduation rates, net of other state and institutional controls.