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Study on Performance-Based Funding in 3 States

July 21, 2017

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.

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Paul Fain

Paul Fain, Contributing Editor, came to Inside Higher Ed in September 2011, after a six-year stint covering leadership and finance for The Chronicle of Higher Education. Paul has also worked in higher ed P.R., with Widmeyer Communications, but couldn't stay away from reporting. A former staff writer for C-VILLE Weekly, a newspaper in Charlottesville, Va., Paul has written for The New York Times, Washington City Paper and Mother Jones. He's won a few journalism awards, including one for beat reporting from the Education Writers Association and the Dick Schaap Excellence in Sports Journalism Award. Paul got hooked on journalism while working too many hours at The Review, the student newspaper at the University of Delaware, where he earned a degree in political science in 1996. A native of Dayton, Ohio, and a long-suffering fan of the Cincinnati Bengals, Fain plays guitar in a band with more possible names than polished songs.

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