The Rise of Performance-Based Funding

Performance-based funding in higher education may leave a lot to be desired, but it’s here to stay. The reasons? Growing economic pressures, lawmakers’ demands for accountability, and the belief that a college credential is needed to land a good job.

A majority of states now use some form of these models, which allocate a portion of higher-education funding based on how well public colleges meet desired performance goals. The success of performance-based funding, however, is far less certain: Experts are divided over how these models should measure success, and whether they improve student performance. A poorly designed formula can actually hurt students by encouraging colleges to “game” the system, shutting out students who need more academic support.

This issue brief, The Rise of Performance-Based Funding, offers college leaders and policymakers practical advice, historical context, case studies, data, and other resources to help navigate the intricacies of this increasingly popular funding model. As performance-based funding evolves, public colleges are becoming more sophisticated about pushing for changes that better reflect their missions and help their students. 

Purchase your copy for insights into:

• The motivations of lawmakers and others seeking greater accountability
• The types of institutional benchmarks used to demonstrate student success
• The features that make some funding models more effective than others
• Why formulas can have unintended negative consequences, like shutting out low-income and minority students
• How some states are working with colleges to create fairer metrics

Date: May 2019
Pages: 36
Digital File Size: 7.09 MB

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