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This paper consists of results of a state survey and case studies of Minnesota and Massachusetts, two states with recent histories in implementing tuition formulas. Both case studies are discussed within the context of state fiscal conditions and appropriations. The survey revealed that 16 states are attempting to establish an enduring rationale for their tuition levels by utilizing a pre-set number to serve as a yardstick for setting tuitions. The report attempts to assess, among other things: (1) Whether tuition formula systems succeed in bringing policy rationales and predictability to the state financing structure; (2) Whether tuition formulas also may cause consequences that are not positive in terms of access and quality; and (3) Whether there are ways to maximize positive consequences and minimize the negative. Among the study's conclusions are that: percent-of-cost formulas may bring a sense of predictability to the institutional funding process without leading to higher than average tuition hikes; that such formulas do not result in an overall decline in access nor confer advantages on private institutions; that such formulas, however, do not appear to lead to more stable support for public institutions and students; and that student aid benefits may not keep pace with formula generated tuition increases. Four major recommendations propose: (1) an interlocking formula for appropriating funds to public institutions; (2) an interconnecting state policy for setting financial aid benefits; (3) protections against steep tuition increases; and (4) provision for a follow-up assessment of enrollment trends. The appendix provides a summary of the results of questionnaires and phone interviews used to collect data in the other 14 "tuition formula" states. A bibliography of 12 references is attached. (GLR)