New Evidence on the Evolution and Landscape of Performance Funding for Higher Education

ABSTRACT

This study draws upon the first detailed longitudinal dataset on performance-based funding (PBF) to document the evolution and current landscape of PBF in American higher education. We show that while PBF has become increasingly common, states have experimented with adopting, abandoning, and re-adopting PBF over time. We also find a new wave of PBF adoption occurring in the 2010s following the Great Recession. However, PBF remains a relatively weak policy lever with a small share of funds at stake in most states and some states not funding PBF even when it exists in legislation. Equity considerations vary in the student groups they include and less than half of two-year and three-quarters of four-year PBF systems include race when allocating performance funds. Our findings complicate some common characterizations of PBF and offer new insight for researchers examining how PBF policy design shapes student and institutional outcomes.

KEYWORDS:

• Performance-based funding
• higher education
• education policy
• state policy
• education policy analysis

Acknowledgement

We are grateful for feedback from John Cheslock on an earlier version of this manuscript and for the excellent research assistance of Karly Caples, Nick Voorhees, Garam Chu, and Junghee Choi. Any errors or omissions are our own, and the views expressed in this report are solely those of the authors.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This work was supported by the Arnold Ventures; Joyce Foundation; William T. Grant Foundation.