The aim of this article is to explore the relationship between the desired outcomes of the National Plan for Higher Education and the funding formula. It further wants to explore the current situation regarding specific challenges in higher education, namely increased participation, broadened social base of students and equity, as well as a lowering of the dropout rate and an increase in graduate outputs. The question is also asked whether the funding formula is successful in being a goal-oriented and performance-based mechanism supporting and even driving institutions of higher education in obtaining the goals as stated in their institutional plans. The author also reflects on recent developments regarding the funding formula. (Contains 4 tables.)