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 What States Are Doing
 Selected Research & Readings

Performance Funding: Impacts, Obstacles, and Unintended Outcomes - Over the years, 32 states have implemented some form of performance funding. This brief distinguishes between PF1.0 which involves a bonus on top of regular state funding and PF2.0 which, typically, retains enrollments as one funding driver. Based on studies of PF1.0 (PF2.0 is still in its early days), while performance funding has had immediate effects on institutional knowledge of state priorities and its own metrics, there was little evidence it brought increased state resources to implement goals. It led to intermediate changes intended to improve student outcomes, but those changes didn't necessarily work. The brief reviews obstacles and unintended impacts, then offers possible solutions. (Community College Research Center, February 2014)...

Outcomes-Based Funding: The Wave of Implementation - What used to be performance funding now is called outcomes-based funding, and while desired outcomes vary from state to state, one universal goal is upping the graduation rate. As more states move to outcomes-based funding, aligning their programs with state goals, more is known about what works in implementation and design. Dennis Jones writes that the issue now is one of political will, not technical know-how. State examples are provided. (Dennis P. Jones, NCHEMS and Complete College America, October 2013)...

Performance-Based Funding: The National Landscape - Relying on a formula utilizing performance indicators, performance-based funding (PBF) is gaining a national foothold. This brief offers a look at where each state is: 22 have PBF in place, 7 are in transition, 10 are in formal discussion, 12-including the District of Columbia-had little evidence of activity. Researchers haven't yet found a link between PBF and improved student outcomes. States considering implementation or modification should consider: stakeholder involvement, sector-specific measures, linking measures with state goals and gradual phase-in. (Janice Nahra Friedel, Zoe Mercedes Thornton, Mark M. Damico and Stephen G. Katsinas, University of Alabama Education Policy Center, September 2013)...

Envisioning Performance Funding Impacts: The Espoused Theories of Action for State Higher Education Performance Funding - A recent study explores the reasons Indiana, Ohio, and Tennessee pursued performance funding in higher education. While each state has been praised for its proactive stance to improve student and institutional outcomes, the study finds that the state-level policies do not sufficiently account for the unintended impacts of performance funding, including compliance costs, adulteration of quality, and perverse incentives to focus only on the activities that state legislatures have prioritized. (Kevin J. Dougherty, Sosanya M. Jones, Hana Lahr, Rebecca S. Natow, Lara Pheatt and Vikash Reddy, Community College Research Center, August 2013)...

Making Performance Funding Work for All - This brief provides an overview of performance funding in the states, highlighting the importance of performance funding systems that cover all students, including non-traditional students, and values their progress and success in determining institutional funding. The brief concludes with policy recommendations for WPFP state partners to ensure that performance funding works for all students. (Working Poor Families Project, June 2012) ...

Improving Measurement of Productivity in Higher Education: Panel on Measuring Higher Education Productivity: Conceptual Framework and Data Needs - The panel authoring this report was charged with the task of identifying an analytically well defined concept of productivity for higher education and recommending practical guidelines for its measurement. The objective was to construct valid productivity measures to supplement the body of information used to (1) guide resource allocation decisions at the system, state, and national levels and to assist policymakers who must assess investments in higher education against other compelling demands on scarce resources; (2) provide administrators with better tools for improving their institutions’ performance; and (3) inform individual consumers and communities to whom colleges and universities are ultimately accountable for private and public investments in higher education. (National Research Council, May 2012)...

Tying Funding to Community College Options: Models, Tools, and Recommendations for States - This brief presents a set of tools that can help states design performance-based funding systems that can influence student and institutional behavior, avoid unintended consequences, and withstand shifts in political and economic climates. (Jobs for the Future, April 2012)...

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