The Relationships Between State Higher Education Funding Strategies and College Access and Success

We compiled the first longitudinal dataset with detailed state funding information to examine whether different funding strategies for public higher education affect college access and completion, with a focus on outcomes among racially minoritized students. We found no relationships between funding mechanisms and student outcomes at community colleges. However, at public universities, we found that funding strategies with a base-plus component that provide across-the-board increases or decreases to colleges may reinforce already-existing funding inequities. This leads to a system in which racially minoritized students, particularly Black students, face challenges to completing a degree.

Robert KelchenNovember 28, 2023Robert Kelchen, Justin Ortagus, Kelly Rosinger, Dominique Baker, Mitchell Lingo

A Typology and Landscape of State Funding Formulas for Public Colleges and Universities from 2004 to 2020

State funding for public higher education institutions is crucial in supporting college access and completion, particularly among students from historically underrepresented groups, yet little is known about these mechanisms and how they are affected by financial challenges. This paper provides the first detailed longitudinal typology of state funding strategies, focusing particularly on formula volatility and equity. We find a gradual shift toward funding models that include a combination of base-adjusted and enrollment and performance metrics, along with a growing focus on equity. During recessions, states frequently revert to across-the-board funding cuts, further disadvantaging underresourced institutions.

The Relationships Between State Higher Education Funding Strategies and College Access and Success

We compiled the first longitudinal dataset with detailed state funding information to examine whether different funding strategies for public higher education correlate with college access and completion, with a focus on outcomes among racially minoritized students. We found no relationships between funding mechanisms and student outcomes at public universities. However, at community colleges, we found that funding strategies that combine base adjustments and enrollment or performance components may increase enrollment but not completions.

Justin OrtagusApril 28, 2023Robert Kelchen, Justin Ortagus, Kelly Rosinger, Dominique Baker, Mitchell Lingo

A National Analysis of Variations in State Financial Aid Program Design and Student Success

The majority of research on the role and influence of financial grant aid typically focuses on federal aid, even though a substantial portion comes from states. State policymakers typically determine how much of a state’s financial aid allocations will be distributed based on students’ financial need, academic merit, or a combination of need and merit. We examined how need-, merit-, and combo-based state-level financial aid policies relate to students’ enrollment and completion using detailed data on states’ financial aid programs available for first-time entering college students for fiscal years 2004-2020. We found little consistent evidence of a relationship between student outcomes and the amount of aid per recipient, though, we did find practically significant correlations with aid eligibility criteria. Among institutions located in states with combo-based aid, requiring a college entrance exam for eligibility was associated with smaller enrollments and lower graduation rates compared to institutions that did not require the exams (though, this finding was not replicated when investigating requiring exams for merit-based aid).

The Revenue Implications of Community Colleges’ Reliance on Local Funding

In this paper, we explore the relationship between community colleges’ reliance on local funding and their total institutional revenue. We find that community colleges’ level of reliance on local funding is negatively related to their total institutional revenue for rural community colleges and community colleges serving an above-average share of low-income students.

Justin OrtagusDecember 14, 2022Justin Ortagus, Dominique Baker, Kelly Rosinger, Robert Kelchen, Olivia Morales, Mitchell Lingo

The Unequal Impacts of Performance-Based Funding on Institutional Resources in Higher Education

This study examines the impact of various types of performance-based funding (PBF) policies on institutional resources across postsecondary institution types. Although 41 states have implemented PBF over time, the design and dosage of PBF policies look very different across PBF-adopting states. We leverage multiple quasi-experimental approaches and find that high-dosage PBF policies had a negative impact on state funding for four-year historically Black colleges and universities (HBCUs) and four-year institutions serving an above-average share of racially minoritized students. We also show that sporadic positive effects of PBF policies on state funding are concentrated primarily among non-minority serving institutions (non-MSIs) and institutions serving below-average shares of racially minoritized or low-income students. Taken together, our findings reveal the unequal impacts of PBF policies and suggest that PBF policy design is an important consideration with critical implications for under-resourced institutions and the underserved students they serve.

Justin OrtagusJanuary 28, 2022Justin Ortagus, Kelly Rosinger, Robert Kelchen, Garam Chu, Mitchell Lingo

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