New Research Finds Negative Consequences of Performance-Based Funding

Two new academic research papers found negative consequences linked to performance-based funding formulas, reports Inside Higher Ed.

One paper, published in Community College Review, found that aggressive forms of state-based formulas can increase public colleges' production of short-term certificates while reducing the number of associate's degrees students earn.

A second paper, published in American Behavioral Scientist, found that minority-serving institutions in states with performance formulas on average lose "significant funding" on a per-student basis compared with other colleges in those states or with minority-serving ones in states without performance funding.

Currently, 35 states connect funding for public colleges to metrics like graduation rates or degree completion, reported Inside Higher Ed. The rewrite of the Higher Education Act that the GOP is advancing in the U.S. House of Representatives also includes aspects of performance funding by requiring that 25 percent of students at minority-serving institutions complete in order for those colleges to be eligible for some funds.


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