Although several studies have examined the extent to which tuition influences college enrollment at the undergraduate level (e.g., Heller, 1999; Kane, 1995, 1999), there is no known research that examines how changes in financial aspects of state higher education policy affect the production of postsecondary degrees. Using state-level data covering several years and from various sources and employing appropriate econometric techniques, this study makes an effort to understand how the production of bachelor's degrees is influenced by selected financial aspects of state higher education policy. Several conclusions may be drawn from this research. First, although not a focus of this study, the results from this research suggest that specific financial aspects of the state higher education policy setting are complexly interrelated and influenced by external factors. This study reveals that changes in tuition at two-year public institutions are influenced by prior changes in tuition at public community colleges. Second, this study also finds that public welfare is a direct competitor with higher education for state funds. Third, the results of the dynamic fixed-effects panel analysis suggest that during the dusk of the twentieth and into the dawn of the twenty-first century, there was convergence among states in the number of bachelor's degrees awarded per undergraduate enrollment in higher education institutions. Fourth, the results of this study suggest that increases in bachelor's degree production are realized as private four-year institutions transform student inputs and other resources into additional bachelor's degrees awarded. Fifth, the finding from this research suggests that after taking into account the presence of private higher education within a state and other variables, increases in tuition at four-year public colleges or universities do not influence the production of bachelor's degrees. Sixth, the results from this research show that increases in state need-based financial aid have a positive impact on bachelor's degree production, even after taking into account the endogeneity of financial aid. Seventh, the results of this study show that bachelor's degrees production within a state is positively related to state appropriations for higher education, even after taking into account the endogenous nature of state support. Eighth, the findings from this research also show that, after taking the market share of private higher education into account, bachelor's degree production is not influenced by state spending on outstanding debt, past economic performance, or the current unemployment rate. (Contains 3 tables and 13 endnotes.)