This publication presents excerpts from a literature review on the process of budgeting and assessing financial need requirements for public colleges and universities. Excerpts highlight funding formula approaches used by some states and higher education institutions, linking funding with educational quality, funding formula development and components, formula usage, and comparative analysis of the existing budget formulas used for justifying budget requests and fund allocation for the operating expenses of state-supported colleges and universities. In addition, excerpted materials examine marginal costs and formula-based funding, a special funding formula for state-supported upper-level institutions, differential funding for statewide systems of postsecondary education institutions, the state university funding process, and state funding formulas for higher education in the Southern Regional Education Board states. Contains 61 references. (GLR)