Human capital is the key to economic development. Without highly-skilled workers, states and territories cannot attract the productive businesses they need. That makes higher education a key element of any governor's growth strategy. But many public colleges and universities are struggling to produce more graduates. Overall graduation rates often hover at 50 percent or below, even as tuition is rising sharply. Rising prices and stagnant output provide a recipe for declining productivity. Fortunately, there are promising efforts underway to break the cycle of rising costs and stagnant output. In recent years, a number of states have developed promising new models for improving college and lowering costs at the same time. Several governors have led the push to launch new universities that are injecting new energy and innovation into higher education. Others are setting up high-quality online campuses and helping traditional institutions overhaul courses with technology, boosting student achievement while reducing costs simultaneously. The innovative models presented in this paper can be adapted by governors nationwide to increase the number of college graduates in tough economic times. (Contains 1 figure.)