Many important issues are being debated including but not limited to student debt reduction, a national policy for K-14 that may include free community college education, and the creation of new federal funding policies in the form of federal matching or maintenance of effort policies that hold state legislatures more accountable for maintaining or increasing their public higher education operating budget investments. Fueling these issues is the problematic shift in the finance of public higher education operating budgets from states to students and families. This financial shift in who pays for higher education is a consequence of decades of state disinvestment in public higher education and inconsistency on the part of the federal government as a partner to students and the public institutions that serve them. As a result, college officials have been forced to compensate for the loss of state appropriations with a combination of cost-cutting measures and an increased reliance on student tuition and fee revenues at the nation's nearly 1,500 public community colleges, regional, and flagship universities. This has resulted in a student loan debt national crisis of nearly $1.8 trillion, a five-fold increase since 2003. This paper attempts to examine these state spending patterns and the emerging shift in state legislative priorities, and how they are influenced by federal funding policies and incentives. Additionally, policy questions are emerging about how these state expenditure shifts are highlighting a potential intergenerational taxation shift or wealth transfer that has indirectly contributed to approximately $1.745 trillion in student loan indebtedness.