Two recent reports by the Institute for Higher Education Policy describe the increasing “economic stratification” of the nation’s higher education system. In The Tuition Puzzle: Putting the Pieces Together, the Institute (1999) concluded, based on its review of prior research, that decreasing shares of students from middle- and upper-income families are enrolling in public two-year institutions, while increasing shares of students from upper-income families are enrolling in public and private universities. In The Policy of Choice: Expanding Student Options in Higher Education, the Institute (2002) concluded that choice is “declining” for some groups of students, particularly dependent undergraduates with the lowest family incomes. The findings in Unequal Opportunity, a report released by the Lumina Foundation for Education (Kipp, Price, & Wohlford, 2002), suggest that state public policies are one source of economic stratification and that the extent to which college choice is restricted for low-income students varies across the 50 states in part because of variations in state public policies. For example, the report shows that all public four-year colleges are “affordable” for low-income, dependent students, even with borrowing, in only five of the 50 states (Alaska, Arkansas, Hawaii, Kentucky, and Wyoming). This study addresses the observation by the Institute for Higher Education Policy (1999) that data is needed on the causes of higher education’s economic stratification. Using multilevel modeling, we empirically test the suggestion that state public policies influence the type of college or university that high school graduates attend, after taking into account student level predictors of enrollment.