The purpose of this dissertation is to examine the effects of fiscal policy rules for funding higher education on macroeconomic concerns. Alternative government funding policies impact an endogenous household decision over post-secondary higher education and subsequently, economic output, growth, and income distribution. The link between human capital and economic growth is well documented. This work gathers many disparate ideas about how human capital is formed and its use in improving labor productivity and expansion of the variety of goods produced through research and development. The models employ a multi-period overlapping generations framework. In the initial period, workers sort themselves through educational choice into three skill groups: low-skill(no college education), medium-skill (college degree in non-R & D curricula), and high-skill (college degree in R & D). The high-skill group performs research and development. Newly minted products must pass through an adoption process before becoming usable. The low and medium-skill groups are imperfect substitutes in the production of intermediate goods. Final goods are produced by combining adopted technologies and intermediate goods. The second chapter of this dissertation considers a household with full risk-sharing. The third chapter divides the household by skill type, such that they no longer pool resources. However, this model employs a Negishi-weighted social welfare function whereby the marginal utilities of the groups are impacted by aggregate conditions. The steady-state growth models in these two chapters are calibrated to match wage premium data, savings rate data by age, 2% annual economic growth, and data for total money income over the life-cycle. The results of comparative statics exercises in both versions of the model show the impact of alternative funding regimes. Funding high-skilled education improves growth at the ex-pense of lower level effects on output; however, funding medium-skilled education, while having only modest effects of growth, substantially increases output. The fourth chapter seeks to per-form dynamic simulations of these models to explore the business cycle properties and transitional dynamics associated with educational choice and changes to higher education funding