There are two modalities for delivering public financial support to colleges and other postsecondary education providers. First, typical of state governments, grants are made directly to postsecondary institutions to finance general operations, thus providing a broad subsidy to all students. Second, typical of the federal government, substantial but indirect financial support to individual postsecondary institutions is delivered via student grant and loan programs. Those students in turn use that financial support to pay tuition at the colleges they have chosen to attend. Very broadly speaking, states provide general institutional subsidies while the federal government provides specific student subsidies. A 21st century postsecondary education financing framework should recognize the two modalities and finds ways to align state and federal investments in colleges and students around the national imperative to improve student outcomes. With an outcomes-based approach, a new state/federal postsecondary finance framework can emerge. The authors of this paper recommend five initial steps states and the federal government could take to connect postsecondary funding to student outcomes: (1) Collect, nationally, student-level data on a common set of student outcomes and metrics, including the attainment of high-quality credentials; (2) Create greater federal waiver authority around Pell Grants; (3) Utilize common access, completion and employment metrics in state and federal funding for institutions; (4) Require well-designed outcomes-based funding in state funding for institutional operations or student aid as conditions for new federal funding; and (5) Identify high quality credentials by utilizing the federal workforce delivery system. An appendix provides supplemental figures and tables. [This report was written with Martha Snyder, Jeff Stanley and Scott Boelscher.]