This paper shows to what extent a national policy for higher education state funding to finance state owned and private universities members of the Council of Rectors of Chilean Universities (CRUCH) caused economic and territorial impaired resource allocation among institutions. Despite political changes, current funding for higher education policy, implemented more than three decades ago, remains untouched. Correlation analysis of current financing variables, confirms impaired resource allocation among institutions between 2011 and 2012, specially valid for state owned regional universities, verifying “clear initial disadvantages”, because of basal resource supply in an offer financing system, showing the greater amount provided to higher complexity institutions, mixing direct funding instruments with subsidies to the demand, grants and credits, in a highly competitive system, with strong effect in the ranking, classification, reputation and social perception of the institutional prestige.