This paper presents a plan for federal financing of higher education that would also promote positive incentives for the sectors involved in postsecondary education. The underlying rationale of this financing plan is to give the greatest help to institutions that enroll students from those states that are making the largest efforts in support of education. The federal government would provide general assistance directly to institutions of postsecondary education through a financing program that is tied to the students enrolled. To receive its general assistance dollars, an institution would have to report only the number of students it has enrolled from each state. The federal government would then multiply these enrollment figures by the grant associated with students from each state. The dollars resulting from this calculation would then be given directly to the reporting institution. A separate 20-page synopsis of the plan is included with the report. (Author/HS)