Higher education is important for development every society and it could be defined as basic initiator of economic progress. Education allows increase of competitiveness and productivity which is based on knowledge and inovations. System of higher education in Croatia is mostly funded from public sector. In 2003 Bologna proces was implemented and it is applying on every study program in Croatia since 2005. Institutions of higher education in Croatia are divided into universityes, polytechnics and high schools. Quality of higher education is highly correlated with financing higher education. Percentage of GDP for higher education is different by countries. Public funding is in most cases based on full amounts where administration of Higher Education Institutions take responsibility for internal allocation of resources. Unlike Public Institutions of higher education, Private Higher education Institutions in Croatia are funded from own resources (tuition). In Croatia, Ministry of science, education and sport remits institutions of higher education resources as an integral sum, and universityes that resources distribute according to theirs criterias. In higher education, there are four different models of financing education: European, American, British and Japanese-Australian model. Within european countries, there are appearing instruments of financing like agreement of objectives, basic budget, budget based on formula and tuition. Higher education system can be shared on three cycles: undergraduate, graduate and doctoral. Some european countries have their own model that underlies financing higher education and according to that are described models of financing in five EU countries. Performance indicators in higher education provide quality of higher education system and allows interest of prospective students for individual study programs.