Performance Funding for Higher Education: Current Evidence, Unanswered Questions, and How New Data Can Inform Policy

In 2020, 33 states had PBF policies that existed either through state legislation or higher education agency approval, and 41 states have had PBF policies in place at some point since 1997. Unsurprisingly, given the popularity and growth of PBF policies over time, a large body of literature has emerged that examines the intended and unintended consequences of PBF. This literature largely indicates PBF policies have done little to improve degree completion and have resulted in unintended consequences that are likely to widen racial and economic educational disparities. This brief summarizes literature that examines the intended and unintended consequences of PBF and highlights unanswered questions regarding PBF policies. We then offer insight into how new data that our InformEd States team has collected can be leveraged to examine these unanswered questions and inform policymakers regarding how to design equitable and effective PBF policies.

A National Analysis of the Impact of Performance-Based Funding on Completion Outcomes Among Underserved Students

Due to concerns about college completion rates and the rising price of higher education, a growing number of states have sought to identify ways to hold public colleges and universities accountable for their outcomes. Despite the wide reach and considerable support of performance-based funding policies throughout the United States, prior research has shown that PBF adoption does not typically lead to improvements in the completion outcomes being incentivized. Additional work has reported that PBF policies can lead to unintended consequences, such as restricting access to higher education for historically underserved students. Given that PBF policies appear to be a firmly entrenched feature of higher education finance, the conversation surrounding PBF must shift from whether PBF systems will persist to how to design and implement more effective, equitable, and evidence-based PBF policies.

Justin OrtagusMay 19, 2021Justin Ortagus, Kelly Rosinger, Robert Kelchen, Nicholas Voorhees, Garam Chu

The Landscape of Performance-Based Funding in 2020

In this policy brief, we detail the landscape of state performance funding policies in Fiscal Year 2020. Twenty-nine states currently have policies in place through which higher education institutions receive a portion of state funds based on student outcome metrics. The share of funds and types of metrics tied to student outcomes vary considerably across states. A majority of PBF states tie some funding to the success of students from low-income families and about half explicitly outline race as a consideration in their PBF formula.

Elise GrinsteadJanuary 31, 2020Kelly Rosinger, Justin Ortagus, Robert Kelchen, Alexander Cassell, Nicholas Voorhees

Profiles Of State Performance Based Funding Policies: Missouri, New York, And Tennessee

In this policy brief, we highlight three states’ performance funding policies (Missouri, New York, and Tennessee) over the last few decades. We chose these states as examples of how PBF policies vary considerably across the country and how determining whether a state even had PBF in a given year can be difficult. By providing details about the history and mechanics of these systems, we hope to spark conversations among policymakers and researchers about the importance of identifying and understanding the nuances of funding policies across states.

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Justin OrtagusOctober 11, 2019Robert Kelchen, Justin Ortagus, Kelly Rosinger, Lynneah Brown, Nicholas Voorhees

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