February 2017 | Anna Cielinski and Duy Pham
Excerpted from the summary:
State funding for public post-secondary institutions has traditionally been based on enrollment, but today more than two-thirds of states use or will soon use some form of outcomes-based funding (OBF) or a previous model known as performance-based funding (PBF) in four-year, two-year, and/or technical colleges.
Although many states have experimented with one of these forms of performance funding, to date, only a few states have tied a significant percentage of state funding to outcomes. Outcomes-based funding (or PBF 2.0) rewards institutions for student outcomes, like student progress or completing degrees.
In this paper, we refer to “equity measures” as performance measures within an OBF system that serve two related purposes: First, they counteract or mitigate OBF’s incentives for public post-secondary institutions to increase selectivity, which may leave behind low-income, underprepared, and/or adult students, as well as students of color. Second, equity measures can help ensure that institutions serving students most in need have sufficient resources to help them succeed.