Performance Funding in Massachusetts

June 17, 2015

Massachusetts' nine public universities will have some of their state support tied to a funding formula based on the number of students they graduate. The state board of higher education on Tuesday voted to approve the formula and will apply $5.6 million to it in the coming fiscal year.

The board described its approach to performance funding in a news release: "It is based on a complex formula of metrics and weights developed by NCHEMS, the National Center for Higher Education Management Systems. An institution’s share of the funding will be determined in part by its five-year graduation rates, annual head count, full-time enrollment, year-over-year increases in degrees awarded, the numbers of students who reach 30 and 60 credit hours each year (with additional points awarded for low-income students who qualify for federal Pell Grants), as well as numbers and types of degrees awarded (with additional points awarded for degrees in 'priority fields' such as STEM, health, business and education). Campuses are also awarded points for 'degree productivity,' the cost of producing a degree per $100,000 in total revenue."

Community colleges in Massachusetts have received some performance funding since 2013. While the formulas are different, the board said both seek to close achievement gaps and to improve the graduation rates of underrepresented minority and low-income students.

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