The document discusses the shift towards performance-based funding (PBF) in higher education as a means to improve student graduation rates and outcomes, moving away from traditional enrollment-based funding models. It highlights various challenges associated with PBF, including potential impacts on admissions criteria, collaboration among institutions, and long-term planning. Additionally, it emphasizes the need for evidence-based initiatives to effectively enhance student retention and success.

1. Citations:
1. State Funding is typically allocated to colleges based on how many full-time equivalent students they have enrolled at the beginning of the semester. That model
provides incentives for colleges to enroll students but not necessarily to help them graduate. Performance Based Funding allocates funds to colleges based in part
on student outcomes.
2. Complete College America "Georgetown University Center on Education and the workforce, 2009" Complete College America. N.p., n.d. Web. 07 Aug. 2013.
3. “U.S. Department of Education, NCES” Integrated Post secondary Education Data systems human resources component, Spring 2010 enrollment, and Fall 2010
completions, prepared May 2011.
4. “The College Completion Agenda 2012 Progress Report” Completion Agenda College Board Advocacy & Policy Center. N.p., Web 26 Aug. 2013.
5. Jaschik, Scott, and Doug Lederman. "The 2013 Inside Higher Ed Survey of College and University Business Officers." CFO Survey Reveals Doubts About Financial
Sustainability | Inside Higher Ed. N.p., n.d. Web. 12 Aug. 2013.
6. "Performance Funding for Higher Education." National Conference State Legislatures. February 2013. N.p., n.d. Web. 09 Aug. 2013.
7. "American Enterprise Institute." Addressing the Declining Productivity of Higher Education Using Cost-effectiveness Analysis. N.p., n.d. Web. 13 Aug. 2013.
To learn what you can do
InsideTrack works with college and universities to improve student and institutional success. Their
one-on-one student coaching, process expertise, analytics and technology have been proven to increase
graduation rates by an average of 15 percent and enhance the student experience. For more information,
visit www.insidetrack.com
Leadership challenges resulting from PBF
Admissions
Many institutions choose to strengthen admission
criteria, often deviating from their mission of access.
Impact and Cost-Effectiveness
It’s very tempting to implement
multiple unproven initiatives in a
scramble to improve outcomes.
Statewide Coordination
PBF drives increased competition among state institutions,
undermining collaboration & coordination.
Protecting Learning
Most PBF formulas focus on metrics related to
degree production, without explicit mention of
student development & learning outcomes.
Long-Team Planning
Formulas change with the
political landscape, making it
difficult for university decision
makers to conduct long-term
planning.
What can be done?
Higher education institutions should adopt initiatives that are proven to increase retention and completion
in a cost-effective and scalable manner.
InsideTrack
Student/Faculty
Ratio
TRIO Talent Search†
Merit Aid
Upward Bound
Cost-Effectiveness* of
Higher Education Programs7
*Cost-Effectivness Ratio is calculated by dividing the estimated effect on graduation by the cost of the program.
†Eligibility restricted to academically qualified limited income, first generation (neither parent graduated from a 4-year college) students
InsideTrack works with colleagues in the higher education community to raise awareness, foster dialogue and
share best practices in the area of PBF.
0.04000.00830.03830.00730.0015
HI
RI
CT
VT
NHNJ
MA
DE
DC
Adoption of PBF Initiatives6
Performance funding in place
Transitioning to performance funding
Formal discussions on performance funding
No formal activity
CA
OR
WA MT
ID WY
NV UT
AZ NM
CO
ND
SD
NE
KS
OK
TX
MN
WI
IA
MO
AR
LA
IL IN
MI
KY
OH
TN
MS AL GA
FL
SC
NC
VA
WV
PA
NY
ME
AK
MD
AS GU MP PR VI
*Feb. 2013
PBFPerformance Based Funding
— A new era in accountability?
Many states are now reconsidering the funding by enrollment model for state appropriations1
PBF
Regulations and public scrutiny
are focusing attention on
improving student outcomes
while controlling cost
Enrollment rates have grown
for decades while graduation
rates remain flat3
62% of jobs will require college education by 2018, and more
than half of those will require at least a bachelor’s degree2
92%of Colleges &
Universities CFO’s cite
retention
as their top priority5
According to a
recent survey,
Why Now?
AfricanAmerican
AmericanIndian
Asian
Hispanic
White
37.7%
66.3%
48%
59.2%
38.5%
National Six-Year
Graduation Rates of
Public University
Baccalaureate
Students4
Race/Ethnicity