Options for evaluating the performance of Washington state colleges based on student outcomes are discussed. Considered in "Question Number 4" on the agenda of the Washington State Higher Educaton Coordinating Board: how should the performance of higher education institutions be evaluated and by whom? Of concern is what student outcomes to measure, whether student progress should be influenced by the measure, and whether the evaluation should be designed at the state or college level. Three ways of assessing student performance provide useful data about college performance: assessment of student achievement, graduate placement rates, and alumni satisfaction surveys that indicate cognitive and affective student outcomes. Advantages/disadvantages of the following assessment options are discussed: sophomores and seniors should be assessed to determine communication and computation skills; seniors should be assessed to determine mastery of their major; graduates should be assessed to determine subject matter proficiency; and colleges should summarize the job placement of graduates and their satisfaction with their education, as well as employers' satisfaction with graduates. Attached is a 64-page report prepared for the Washington Higher Education Coordinating Board, and entitled "The Evaluation of Institutions of Higher Education in the State of Washington." The report includes Appendixes A through G, on: Testing (Gerald M. Gillmore); Value Added Testing (Robert M. Thorndike); Assessment of Alumni (Fred E. Fiedler and Douglas J. Allmon); Sample Questions; Expense Considerations; and Reviewer Comments. (SW)