A growing number of states have adopted or are seeking to enact outcomes-based funding in higher education, which scholars say is indicative of the fact that states are grappling with larger issues of funding for higher education in general.
Twice as many states – four – as the prior year adopted outcomes-based funding in higher education in 2017, and a growing number of state legislatures made an effort to do so but got thwarted, according to a new analysis released Tuesday by the Education Commission of the States.
So far this year, Arkansas, Kentucky, Texas and Utah all adopted some form of outcomes-based funding, or OBF, whereas last year, Michigan and Rhode Island were the only states to do so.
But the bigger picture shows that an increasing number of state legislatures have at least considered outcomes-based funding, which seeks to incentivize colleges and universities to increase performance in certain key areas, such as retention and completion, by allocating a certain amount of funding based on how well they perform on those particular indicators.
Excluding appropriations bills, at least 14 states considered OBF legislation in 2017, versus at least nine in 2016.
A total of 34 OBF bills were introduced this year, of which four were ultimately enacted. One enacted bill — in Florida — was vetoed, and five are still pending, according to a policy brief from the Education Commission of the States.
“The increase in outcomes-based funding is a sign that states still struggle to adequately fund higher education, and they are looking for a more certain return on that limited public investment,” said Dr. Tiffany Jones, director of higher education policy at The Education Trust, an advocacy and policy organization that focuses on low-income students and students of color.
