A decade ago, the National Center for Public Policy and Higher Education (the National Center) issued a policy brief, "State Capacity for Higher Education Policy." The National Center's core recommendation: States must have a broad-based, independent, credible public entity with a clear charge to increase the state's educational attainment and prepare citizens for the workforce. This paper reviews the historical development of the state role in higher education as a foundation for discussion of these questions: (1) Was the recommendation of the National Center realistic? What barriers continue to exist to the establishment of a state policy leadership entity?; and (2) What alternatives are available to provide the needed state policy leadership, especially in cases where existing structures are unable to play this role? There are essentially six functions that fall within the purview of entities labeled "state higher education agency:" (1) State-level planning; (2) State finance policy: budgeting, appropriations and resource allocation; (3) Maintenance of databases and conversion of data into information that guides policy making; (4) Regulation of higher education institutions or academic programs; (5) Administration of state-level services (for example, administration of student financial aid programs); and (6) Governance of higher education systems and institutions. In some states, a single entity is responsible for most or all of these functions. However, in most states, the responsibility for these functions is dispersed among multiple entities. How states carry out these six functions has evolved over time. The origins of current structures are rooted in each state's history and culture. This paper reviews the development of the state role in higher education using these six functions as an organizing framework. The framework provides a template that states can use to diagnose how they carry out these functions. Appended are: (1) Six State-Level Functions: Summary of Change Over Phases; (2) Change in Complexity of Major Decision-Points That Affect State Higher Education Policy, Early 20th Century to Present; and (3) Authority of State Boards and Agencies of Higher Education, 2015.