Using stochastic frontier analysis and dynamic fixed-effects panel modeling, this study examines how changes in the x-inefficiency of bachelor's degree production are influenced by changes in state higher education policy. The findings from this research show that increases in need-based state financial aid help to mitigate the convergence among states in x-inefficiency with regard to bachelor's degree production. (Contains 7 tables, 1 footnote and 5 endnotes.)