Research for Action has released the results of a two-year examination of three states' performance-based funding formulas for public colleges.
With funding from the Lumina Foundation and the Bill and Melinda Gates Foundation, the Philadelphia-based nonprofit research organization used a mixed-methods approach to study policies in Indiana, Ohio and Tennessee. The quantitative side of the research drew from both federal and state databases. The effort also included case studies on implementation of the policies at both community colleges and four-year institutions.
The group sought to determine whether the formulas have an effect on student outcomes and, if so, for which students and under what conditions.
While the states' policies vary significantly, the overall finding was that such policies can have a positive effect.
"Student-level data in Indiana and Tennessee provide convincing evidence that outcomes-based funding has a strong, positive effect on a range of both interim and long-term outcomes for full-time students in these states. In Ohio, it’s too early to tell," the study said.
Linking public colleges' base funding to institutional results such as degree and certificate production can create change, the group found. Other key factors include a strong state leader, clear messaging and a sense of competition.
On the negative side, the group said performance-based funding effects were weaker or negative for part-time students in Indiana and Tennessee, and for disadvantaged students.
"State and institutional policies should be refined to better ensure equitable results across all students," the study said.