Around 35 US states now provide performance funding (PF) for higher education (National Conference of State Legislatures 2017). Under PF, state funding for higher education is not based on enrollments and prior-year funding levels. Rather, it is tied directly to institutional performance on such metrics as student retention, degree completion, and job placement. The amount of state funding tied to performance indicators ranges from less than 1% in Illinois to as much as 80–90% in Ohio and Tennessee (Dougherty et al. 2016; National Conference of State Legislatures 2017).
Forms and Evolution
Two kinds of performance funding programs can be distinguished (Dougherty and Natow 2015; Snyder 2015). Performance funding 1.0 (PF 1.0) takes the form of a bonus, over and above regular state funding for higher education. The typical size of this bonus is between 1% and 5% of state funding (Dougherty and Natow 2015). Performance funding 2.0 (PF 2.0) differs from PF 1.0 in that it no longer takes...
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References
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Dougherty, K.J. (2018). Performance-Based Funding, Higher Education in the US. In: Shin, J., Teixeira, P. (eds) Encyclopedia of International Higher Education Systems and Institutions. Springer, Dordrecht. https://doi.org/10.1007/978-94-017-9553-1_63-1
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Performance-Based Funding, Higher Education in the US- Published:
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DOI: https://doi.org/10.1007/978-94-017-9553-1_63-1