Performance-based funding (PBF) policies are an increasingly common way for states to tie funding for public colleges and universities to student outcomes. Yet amid growing concerns about student debt, the potential exists for PBF to affect student debt and ability to repay loans in both intended and unintended ways. In this paper, we use the first comprehensive dataset of PBF policies to examine the effects of PBF on debt and repayment outcomes. We find evidence that PBF policies increased the debt burdens of students who left college without a degree while not affecting the debt of completers.
