Back 

Performance Funding

Performance-Based Funding for Higher Education

1/13/2015

Historically, many colleges have received state funding based on how many full-time equivalent students are enrolled at the beginning of the semester. This model provides incentives for colleges to enroll students and thus provide access to postsecondary education, but this model does not necessarily provide incentives for institutions to help students successfully complete degree programs. Many states are reconsidering the enrollment-based funding model and instead are aligning funding models with state goals and priorities.

       
In place at two-year institutions In place at four-year institutions In place at two-year and four-year institutions In transition

 

 

State Activity

Thirty states—Arizona, Arkansas, Florida, Illinois, Indiana, Kansas, Louisiana, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, New Mexico, Nevada, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, South Dakota, Tennessee, Texas, Utah, Virginia, Washington, Wisconsin, and Wyoming—have a funding formula in place that allocates some amount of funding based on performance indicators such as course completion, time to degree, transfer rates, the number of degrees awarded, or the number of low-income and minority graduates.  Four states—Colorado, Georgia, Iowa,  and South Dakota—are currently transitioning to some type of performance funding, meaning the Legislature or governing board has approved a performance funding program and the details are currently being worked out.

State Activity Details

 

State

Status

Funding Amount

Metrics

Supporting Documents

Arizona

In place at four-year institutions

For Fiscal Years 2013 and 2014, $5 million per year was allocated through the performance formula. Beginning in Fiscal Year 2016 all budget requests and allocations above the base funding amount will be allocated according to the  performance funding formula developed by the Board of Regents.

  • Degrees awarded
    • 15% bonus for certain high demand degrees
  • Completed student credit hours measured in milestones of 24 completed credit hours
  • External research and public service dollars brought into the university system

Metrics are based on a three-year rolling average of data and are weighted based on institutional mission. Degrees awarded and completed student credit hours are also weighted by cost and degree level.

Ariz. Rev. Stat. Ann. § 15-1626

 

Arizona Board of Regents Performance Funding Model

Arkansas

 

 

 

 

 

 

 

 

 

 

 

 

In place at two-year and four-year institutions

Five percent of funding in the 2012-2013 school year, and increasing by 5% increments until capped at 25% during the 2017-2018 school year. The remaining 75 percent of funding will be based on enrollment and institutional needs.

Performance measures are organized into mandatory, compensatory, and optional categories. Mandatory measures vary by institutional type and account for forty percent of all performance funding with the remainder based on optional measures selected by each institution. The four mandatory measures for four-year institutions are:

  • Bachelor credentials earned
  • Total credentials earned
  • Student progression toward degree completion
  • STEM credentials earned

The number of undergraduates receiving Pell Grants is the compensatory measure and is an adjustment that rewards institutions for the success low-income students.

Four-year institution optional measures include: high demand credentials, minority graduates, non-traditional graduates, remedial graduates, Pell Grant (low income) graduates, transfer graduates , course completion, remedial/developmental course completion, progression rate, regional economic needs programs, expenditure of federal awards, patents, and new company start-ups.

The two-year college mandatory measures include four major categories:

  • Course completion
  • Progression
  • Credential completion
  • At-risk students relative to enrollment

At-risk students are considered a mandatory-compensatory category.


Optional measures for two-year colleges include: STEM credentials, high demand credentials, workforce training, transfer, adult credentials, minority credentials, and employment.

2011 SB 766

 

Department of Higher Education performance funding website

Colorado

In transition

The Colorado Commission on Higher Education has proposed a formula that will begin in 2016-17 if approved by the legislature. Under the proposed formula, 56% of funding will be a College Opportunity Fund stipend. The remaining funding will be allocated as follows:

  • 60% for Role and Mission
  • 40% for Performance

The Colorado Commission on Higher Education proposed metrics for retention and completion with additional weights for type of credential earned.  

2014 HB 1319

Department of Higher Education outcomes-based funding website

Florida

In place at four-year institutions

For FY2015, $200 million was allocated according to the performance funding formula—$100 million in new state funding, $65 million from institutional base budgets, and $35 million from University System of Florida initiatives.

In January, 2014, the Board of Governors adopted a revised performance funding formula.  Under the new formula, the amount of new state funding appropriated by the Legislature for performance funding will be matched by an equal amount reallocated from the university’s base funding. Each institution is assigned a value between 1 and 5 based on performance of the 10 metrics. To receive the new performance funding, institutions must earn more than 25 points. Any institution not receiving at least 25 points or the three lowest score institutions will not receive any new funds. To retain base funding, institutions must earn more than 25 points. If institutions earn at least 26 points, then they are eligible to receive additional funding with the highest scoring universities eligible for more funding. Institutions not earning more than 25 points will incur a reduction in base funding that will be capped at 1 percent in the first year of the formula.

The new model adopted by the Board of Governors uses the following 10 metrics.

  • Percent of bachelor's graduates employed and/or continuing their education further one year after graduation
  • Median average full-time wages of undergraduates employed in Florida one year after graduation
  • Average cost per undergraduate to the institution
  • Six Year Graduation Rate
  • Academic Progress Rate (2nd Year Retention with GPA Above 2.0)
  • Bachelor's Degrees Awarded in Areas of Strategic Emphasis
  • University Access Rate (Percent of Undergraduates with a Pell-grant)
  • Graduate Degrees Awarded in Areas of Strategic Emphasis (applies to all institutions except New College)
    • Freshman in Top 10% of Graduating High School Class (only applies to New College)
  • Metric chosen by Board of Governors
  • Metric chosen by Board of Trustees

Fla. Stat. § 1011.905

New model adopted January, 2014

Board of Governors performance-based funding website

Georgia

In transition

Beginning in FY 2016, all new money appropriated will be based on institutional performance.

While the specific measures are still being developed, the following elements are being considered:

  • Student progression
  • Degrees conferred
  • Success of low-income and adult learners
  • Institution specific measures to account for different missions and strategic initiatives

Higher Education Funding Commission Report

Hawaii

In place at two-year institutions

The Community College system allocated $6.5 million in performance funding for FY15—$3 .5 million from tuition revenue holdback and $3 million from general fund appropriations

The outcomes incorporated into the formula include:

  • Degrees and certificates awarded;
  • Degrees and certificates awarded to Native Hawaiian students;
  • Degrees and certificates awarded to students in Science, Technology, Engineering, and Math (STEM) fields;
  • Number of low-income students participating the Federal Pell program;
  • Number of transfers from the community colleges to the baccalaureate campuses.

2008 HB 2978

2013 Performance Funding

 

Illinois

In place at two-year and four-year institutions

Less than 1% of base funding

Measures for four-year institutions:

  • Bachelor’s degrees
  • Master’s degrees
  • Doctoral and professional degrees
  • Undergraduate degrees per 100 FTE
  • Research and public service expenditures
  • Graduation rate - 150% of time
  • Persistence-completed 24 semester hours in one year
  • Cost per credit hour
  • Cost per completion

Measures for two-year institutions:

  • Degree and certificate completion
  • Degree and certificate completion of “At Risk” students
  • Transfer to a four year institution
  • Transfer to a community college
  • Remedial and adult education advancement
  • Momentum points
     

Additional weight is provided for graduates who are low-income, adult, Hispanic, African American, majored in a STEM or health care field.

Public Act 97-320

Higher Education Performance Funding Steering Committee

 

Indiana

In place at two-year and four-year institutions

6% for FY 2014 and FY 2015

Metrics for two-year and four-year institutions include:

  • Degree completion
  • At-risk degree completion
  • High impact degree completion
  • Persistence
  • Remediation success
  • On-time graduation
  • Institution selected measure

Indiana Commission for Higher Education performance funding website

Iowa

In transition

The Iowa Board of Regents approved a new funding model that will allocate 40 percent of state funding based on outcomes metrics and the remaining 60 percent on in-state enrollment. Iowa is expected to transition to the new formula over the next three years.

 

Metrics for the four-year universities include:

  • 15% for progress and attainment
  • 10% for access
  • 5% proportional weighting of all graduate and professional students based on FTE enrollment
  • 10% based on Regent-selected metrics

The remaining 60% of funding will be based on resident FTE enrollment.

Performance-based funding taskforce report

Kansas

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In place at two-year and four-year institutions

New state funds

Institutions submit a Performance Agreement to the Board of Regents for approval once every three years—performance is evaluated annually. The metrics used to evaluate performance are specific to each institution. Community and technical colleges must include at least three indicators below in the performance agreements (at least one from each goal). In addition institutions must also include three indicators specific to the institution which support the state’s current 10-year strategic agenda.

  1. Increasing Higher Education Attainment
  • First to second year retention rates of college ready cohort
  • Three-year graduation rates of college ready cohort
  • Number of certificates and degrees awarded
  • Student Success Index
  1. Meeting the Needs of the Kansas Economy
  • Performance of students on institutional quality measures
  • Percent of students employed or transferred
  • Wages of students hired
  • Third party technical credentials and WorkKeys, if applicable

Four-year institutions  must include at least three indicators below in the performance agreements. One of those indicators must include Goal Three. In addition institutions must also include three indicators specific to the institution which support the state’s current 10-year strategic agenda.

  1. Increasing Higher Education Attainment
  • First to second year retention rates
  • Number of certificates and degrees awarded
  • Six-year graduation rates
  1. Meeting the Needs of the Kansas Economy
  • Performance of students on institutional assessments
  • Percent of certificates and degrees awarded in STEM fields
  1. Ensuring State University Excellence
  • Selected regional and national rankings (research universities only)
  • Performance on quality measures compared to peers (comprehensive universities only)

Kan. Stat. Ann. § 74-3302d

Kansas Board of Regents Performance Agreements

Louisiana

In place at two-year and four-year institutions

15% of base appropriations—institutions can also receive permission to raise tuition by 10% without legislative approval.

Institutions enter into performance agreements with the Louisiana Board of Regents. These agreements establish annual performance targets that are unique to each institution’s mission and based on objectives established in the GRAD Act.

Metrics address the following categories:

  • Student success
  • Change in retention
  • Number of degree and certificate completers
  • Increase passage rates on licensure and certification exams
  • Articulation and transfer
  • Workforce and economic development
  • Employment of degree and certificate earners
  • Research productivity
  • Institutional efficiency and accountability

2014 SB 337

GRAD Act

Board of Regents Master Plan

Maine

In place at four-year institutions

Starting with 5% of base funding in FY 2014 and increasing by 5% increments each year until 30% of base funding is allocated based on performance.

Metrics include:

  • Degrees awarded—additional points awarded for community college transfer students, adults over age 30 earning degrees, and Pell Grant recipients
  • Degrees in STEM, Allied Health, and other high priority fields
  • Number of research grants and contracts received during the year
  • Dollar value of research grants and contracts received during the year
  • Number of degrees awarded per $100,000 of net tuition and fee revenues and State Education and General appropriations scaled by matriculated FTE

University of Main System Outcomes-Based Funding Report

FY 2015 formula modifications

Massachusetts

In place at two-year institutions

After an amount is set aside for operational support, 50% of the remaining funding is considered base funding and allocated according to the number of completed semester credit hours. The remaining 50% of funding is awarded based on performance metrics.

Metrics include:

  • Certificate completions
  • Associate completions
  • Transfers
  • 30 credits achieved
  • First full math and English courses completed
  • Degrees and certificates per 100 FTE students
  • Degrees and certificates awarded to Pell Grant recipients and in high demand fields are weighted more

FY 2014 Budget --see 7100-4000

Michigan

 

 

 

 

 

 

 

 

 

 

 

 

 

In place at two-year and four-year institutions

 For FY 2014-15, $37.3 million in new appropriations for universities was allocated based on performance metrics.

For FY 2014-15, $8.9 million in new appropriations for community colleges was allocated based on performance metrics.

In order to receive performance funding, universities had to meet four requirements:

  1. Limit resident tuition increases to 3.2% or lower
  2. Participate in at least three reverse transfer agreements with community colleges
  3. Maintain a dual enrollment credit policy that does not consider whether credits were used toward high school graduation
  4. Participate in the Michigan Transfer Network

 

Performance metrics for universities:

  • Undergraduate degree completions in critical skill areas
  • Research and development expenditures
  • National comparisons to Carnegie peers on the following measures:
  • six-year graduation rate
  • total degree completions
  • institutional support as a percentage of core expenditures
  • Pell Grant recipients

 

For FY14 performance funding for community colleges was distributed as follows:

  • 50.0% Across-the-board distribution
  • 17.5% Weighted degree completions
  • 15.0% Local strategic value
  • 10.0% Contact-hour equated students
  • 7.5% Administrative spending

FY  2014-15 Higher Education Budget and Performance Funding

 

 

 

 

 

 

Community college metrics are based on the Performance Indicators Task Force

Proposal

 

 

 

 

Minnesota

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In place at two-year and four-year institutions

5% of base funding is reserved until institutions meet three out of five performance goals.

Performance goals for Minnesota State Colleges and Universities:

  • Increase degrees, diplomas, and certificates by at least four percent
  • Increase persistence and completion rate by at least one percent
  • Increase employment rate for graduates by at least four percent
  • Collect data on the number of Open Educational Resources tools and services offered and formulate a plan to actualize a one percent reduction in expenses directly related to the cost of instruction incurred by students
  • Reallocate $22,000,000 that became available through expense realignment
     

Performance goals for the University of Minnesota system:

  • Increase graduation rates for low-income students by one percent
  • Increase total number of STEM degrees by three percent
  • Increase graduation rates by one percent
  • Decrease administrative costs by $15 million
  • Increase invention disclosures by three percent

2013 SF 1236

Mississippi

In place at four-year institutions

After a base amount is set aside for operational support, the remaining funding is divided as follows: 90% of funding is allocated based on the number of credit hours completed and the remaining 10% of funding is allocated based on progress toward priorities established by the Board of Trustees.

The following metrics are used to allocate the 10% of funding based on progress toward priorities established by the Board of Trustees.

  1. Attainment Outcomes
  • Degrees Awarded 
  • At-Risk Students (Pell Recipient, ACT score of less than 19, 25 years and older)
  • Priority Fields (STEM, Health, Education)
  1. Intermediate Outcomes
  • Number of students with an  ACT score of 19 or lower who successfully complete first college-level English or math course
  • Number of students who complete 30 credit hours
  • Number of students who complete 60 credit hours
  1.  Research Activity
  • Includes research expenditures, technology transfer/ entrepreneurship data and patents/licenses—research universities only
  1. Productivity Outcomes
  • Number of undergraduate degrees awarded per 100 FTE
  • Number of graduate degrees awarded per 100 FTE
  • Number of degrees award per $100,000 in revenue

2011 HB 875

Performance Allocation Model Summary

Missouri

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In place at two-year and four-year institutions

The current formula only applies to new appropriations.

Metrics for two-year institutions

  • Three-year completion rate for first-time, full-time entering students (includes students who complete a certificate or degree of at least one year or longer, or successfully transfer to a 4-year institution).
  • Percent of developmental students who successfully complete their last  developmental English course then successfully complete their first college-level  English course.
  • Percent of developmental students who successfully complete their last developmental math course then successfully complete their first college- level math course.
  • Percent of career/technical graduates who pass required licensure/certification examination.
  • Financial responsibility and efficiency measure chosen by each institution. Measures include number of credit hours completed per $100,000 of state appropriations, education and general expenditures per credit hour completed, instructional expense per credit hour, and persistence rates for incoming first-time, full-time students.

Metrics for four-year institutions:

  • Student Success and Progress (institutions will choose one):
    1. Freshman to sophomore retention,
    2.  First-time, full-time freshmen successfully completing 24 hours in their first academic year.
  • Increased Degree Attainment (institutions will choose one):
    1. Total degrees awarded
    2. Six-year cohort graduation rates
  • Quality of Student Learning (institutions will choose one):
    1. Improvements in assessments of general education
    2. Improvements in assessments in the major field
    3. Improvements on Professional/occupational licensure tests
  • Financial Responsibility and Efficiency (institutions will choose one):
    1. Percent of total education and general expenditures expended on the core mission (instruction, research, and public service)
    2.  Increase in educational revenue (state appropriations plus net tuition revenue) per full-time equivalent student at or below the increase in the consumer price index.
  •  One institution-specific measure approved by the Coordinating Board.

Under 2014 Senate Bill 492, each institution is required to add a metric for student job placement in a field or position associated with the student's degree level and pursuit of a graduate degree.

Missouri Department of Higher Education Performance Funding Model

2014 SB 492

Montana

In place at two-year and four-year institutions

5% of base funding will be at stake during the FY2015 trial phase.

Metrics for the FY15 trial phase include:

  • Number of undergraduate and certificates  awarded
  • Retention defined as the percent of first-time, full-time freshmen returning for a second year of enrollment in the Montana University System

Montana University System Performance Funding Website

Nevada

 

 

 

 

 

In place at two-year and four-year institutions

5% of base funding will be at stake during  FY2015. The amount of performance funding increases by 5% increments until reaching 20% in FY2018.

Metrics will be specific to each institution and include:

  • Number of certificates, associate’s degrees, bachelor’s degrees, master’s degrees, doctoral degrees
  • Number of students who transfer to a four-year institution with an associate’s degree
  • Number of students who transfer to a four-year institution with at least 24 credits
  • Number of degrees or certificates awarded per 100 FTE
  • The total amount expended on sponsored programs/projects of research and other scholarly activities for the fiscal year.
  • Number of students who successfully complete a college level English or mathematics course
  • Economic Development – Number of STEM and allied health degrees and certificates
  • Economic Development – total number of certificates and degrees awarded in an institution selected discipline which aligns with the state’s economic development plan.

2011 SB 374

New Model for Funding Higher Education in Nevada

New Mexico

In place at two-year and four-year institutions

Performance-based funding is 5%, and increasing, of  instruction and general formula funding to colleges and universities.

The formula focuses on the following four outputs for all institutions:

  • Course completion rate;
  • Number of certificates and degrees awarded
  • Number  of certificates and degrees awarded in state workforce priority areas;
  • Number  of  certificates  and  degrees  earned  by financially  at-risk  students.

For FY15, the formula will also include funding for mission-specific measures:

  • Research universities: a percent of prior year grant/contract funding
  • Comprehensive institutions: 30 and 60 credit momentum points
  • Community colleges: 30 credit momentum points and completed dual credit courses

Performance funding is included in the annual higher education appropriations.  (Laws 2013, chp. 227). For general descriptions of the formula, see pp. 87, 88 and pp. 341-43

North Carolina

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In place at two-year and four-year institutions

In FY 2014-15, a total of $24 million will be allocated to community colleges based on their performance.

 

In FY 2014-15, $1 million will be allocated to four-year institutions based on performance.

North Carolina established a set of system‐wide baselines and goals for each measure. Based on three years of historical data, baselines were set two standard deviations below the system mean, and the goals were set one standard deviation above the system mean. These baselines and goals remain static for three years and will be reset in 2016. Baselines and goals were set for the following measures:

  • First Year Progression—Percent of first-time fall credential-seeking students who successfully complete at least twelve hours
  • Licensure and certification passing rate
  • Developmental student success rate in college‐level English courses
  • Developmental student success rate in college‐level Math courses
  • Curriculum completion—percent of first-time fall credential-seeking students who graduate, transfer, or are still enrolled with 36 hours after six years
  • College transfer performance—percent of community college associate degree completers and those who have completed 30 or more credit hours with a GPA of 2.00 or better at a North Carolina four-year college or university after two consecutive semesters within the academic year.
  • Basic Skills Student Progress
  • GED diploma passing rate

N.C. Gen. Stat. § 115D-31.3

North Carolina Community Colleges Performance Measures and Funding

2011 SL 145 – see Section8.14

North Dakota

In place at two-year and four-year institutions

Nearly all base funding is calculated by the number of credit hours completed.

The funding formula is based on the number of credit-hours completed by students. A completed credit-hour is one for which a student met all institutional requirements and obtained a passing grade.

North Dakota Cent. Code § 15-18.2

Ohio

 

 

 

 

 

 

 

 

 

 

 

 

In place at two-year and four-year institutions

Ohio is in the process of phasing in changes to the state's performance funding model. In FY2014, 50% of funding for four-year institutions will be based on degree completion and 30% will be based on course completion. For  community colleges, 25% of funding will be based on course completion and 25% will be based on success points

For FY2015, two-year colleges are funded as follows:
50% course completions

25% Completion Milestones—defined as

  • Associate degrees
  • Certificates over 30 credit hours approved by the Board of Regents
  • Students transferring to any four-year institution with at least 12 credit hours earned at that community college, state community college, or technical college

25% Success Points—defined as:

  • Students earning their first 15 credit hours.
  • Students earning their first 30 credit hours.
  • Students earning at least one associate degree.
  • Students completing their first developmental course.
  • Students completing any developmental English in the previous year and attempting any college level English either in the remainder of the previous year on any term this year.
  • Students completing any developmental Math in the previous year and attempting any college level Math either in the remainder of the previous year on any term this year.
  • Students enrolling for the first time at a University System of Ohio main campus or branch this year and have previously earned at least 15 college level credits at this community college.

Additional weights are applied to students who are Pell Grant eligible, Native American, African American, or Hispanic, or are 25 years of age or older when they first enroll at a state institution of higher education.

Four-year colleges are funded as follows:

  • 50% Degree completion
  • 30% Course completion
  • 20% Doctoral and Medical Set Aside

Additional weights are awarded for degree completion in STEM fields. Course and degree completions are calculated on a three-year average.

Ohio performance-based funding website

Student Success Initiative

2014 HB 484

Oklahoma

In place at two-year and four-year institutions

Performance funding only applies to new appropriations

The performance factors are:

  • First-year retention
  • First-year retention for Pell recipients
  • 24 credits in first academic year
  • Cohort graduation rates anywhere in the system
  • Degrees granted
  • Program accreditation

 

Oregon

In place at four-year institutions

For FY15, $3,506,345 was set aside for performance funding

Two metrics were used to allocated FY 2015 performance funding:

  • 50% for the number of degrees each institution awarded (both graduate and undergraduate)
  • 50%  for the number of degrees each institution awarded to underrepresented and/or rural Oregonians (both graduate and undergraduate)

Oregon University System 2014-15 Budget Report Summary

Pennsylvania

In place at four-year institutions

2.4% of the Pennsylvania State System of Higher Education's total educational and general revenue

2011-2017 Revised Metrics include:
Mandatory (5 measures)

  • Student Success: degrees conferred and closing achievement gap
  • Access: close access gap and faculty diversity
  • Stewardship: private support dollars raised

 

Optional (chose 3-5 but at least one indicator must be from the Stewardship category)

  • Success: deep learning scale results; senior survey; student persistence; value added; and STEM degrees
  • Access: faculty career advancement; employment diversity; student experience with diversity; and student diversity
  • Stewardship: facilities investment; admin. expenditures as a % of educational costs; faculty productivity; and employee productivity

University-specific: may create no more than 2 indicators

Pennsylvania State System of Higher Education

2011–2017 Performance Funding Program

South Dakota

In transition

 

Beginning in FY 2016, performance funding will be awarded based on criteria established by the newly created Council of Higher Education Policy Goals, Performance and Accountability. Until then, funds appropriated for performance funding will be awarded based on improvements in two areas:

  • One-half of performance funding will be based on the number of new degrees awarded with special emphasis on degrees in science, technology, engineering, and mathematics (STEM) or other critical need areas.
  • One-half of the funding will be based on the growth of expenditures for research.

South Dakota Codified Laws Ann. §13-48A

 

Tennessee

In place at two-year and four-year institutions

After a base amount is set aside for operational support, 100% of state funding is allocated based on institutional outcomes.

Adults (over 25) and low-income students completing any of the metrics are more heavily weighted. Additional weights are applied to each outcome depending on the priority and institutional mission.  Points are awarded based on outcomes metrics, which are then multiplied by the SREB average salary to monetize the formula. Fixed costs and the Quality Assurance program funds (accreditation, student satisfaction, and licensure exam pass rate) are added on.

University Metrics

  • Students accumulating: 24, 48, and 72 hours
  • Bachelor’s, Master’s, Doctoral, and law degrees
  • Research/grant funding
  • Transfers out with 12 hours
  • Degrees per 100 full-time equivalent (FTE)
  • Six-year graduation rate

Community College Metrics

  • Student accumulating: 12, 24, and 36 hours
  • Dual enrolled students
  • Associated degrees
  • Graduates placed in jobs
  • Remedial and development success
  • Transfers out with 12 credit hours
  • Workforce training (contact hours)
  • Award per 100 FTEs

2010 Complete College Tennessee Act

Tennessee Higher Education Commission Fiscal Affairs

Texas

 

 

 

 

 

 

In place at two-year institutions

 10%

Ten percent of formula funding is allocated based on points earned from a three-year average of student completion of the following metrics:

  • Number of students who successfully complete developmental education in mathematics, reading, and writing
  • Number of students who complete first college level course in mathematics, reading intensive, and writing intensive courses
  • Number of students who successfully complete 15 credit hours
  • Number of students who successfully complete 30 credit hours
  • Number of  students transferring to a General Academic Institution after successfully completing at least 15 semester credit hours
  • Number of degrees and certificates awarded
    • Additional points are awarded for degrees in STEM or Allied Health fields

2011 HB 9

2013 SB 1 – See Section 24 under Public Community/ Junior Colleges

Utah

In place at two-year and four-year institutions

For Fiscal Year 2015, $1.5 million in one-time funding was allocated based on performance. 

The following performance metrics were used to allocate the one-time FY 2015 funding:

  • Graduation rates (100 percent, 150 percent, and 200 percent) by cohort
  • Retention and transfer rates, by cohort
  • Job placement rates following graduation
  • Cost per degree
  • Percentage of students enrolling in, and successfully completing, developmental mathematics course who immediately or concurrently enroll in college level math
  • The amount of grant money applied for and received and the number of research/outreach initiatives funded by non-state-funded grants

2014-2015 Appropriations Report (see pp. 119-122)

2014 HB 2

Virginia

 

 

 

 

 

 

 

 

 

In place at two-year and four-year institutions

Under the incentive-funding model, institutions that meet certain performance targets are able to retain unexpended funds.

Incentive funding metrics include:

  • In-State Enrollment
  • Underrepresented enrollment
  • Degree awards
  • Affordability
  • Need-based borrowing
  • Tuition assessment
  • SACS program review
  • Degrees per FTE faculty
  • Retention rate
  • Degrees per FTE students
  • Transfer agreements
  • Degree transfers
  • Dual enrollment
  • Research expenditures
  • Patents and licenses
  • K-12 partnerships
  • Campus Safety and Security

Virginia Higher Education Opportunity Act of 2011

 

 

Washington

In place at two-year institutions

$10 million in new funding

Student Achievement Measures focus students and institutions on shorter term, intermediate outcomes that provide meaningful momentum towards degree and certificate completion for all students. Colleges can track student progress towards these achievement points each quarter, providing immediate feedback and opportunities for intervention strategies. Measures include:

  1. Achieving college readiness
  • Significant increases in basic skills
  • Earning a high school diploma
  • Completing developmental education sequence
  • Transitioning to college level
  1. First year college success
  • Earning first 15 college level credits
  • Earning first 30 college level credits
  1. Completing college math
  2. Retention and progress
  • Returning and increasing achievement
  1. Second year college success
  • Completing 45 credits towards degrees
  1. Completions
  • Certificates
  • Associate degrees (technical, transfer)
  • Apprenticeship training

Student Achievement Initiative

Wisconsin

In place at technical colleges

10% of base funding will be at stake during  FY2014-15. The amount of performance funding will increase by 10% increments until reaching 30% in FY2016-17

Nine performance metrics include

  • Placement rate of students in jobs related to students' programs of study
  • Number of degrees and certificates awarded in high−demand fields
  • Number of programs or courses with industry−validated curricula
  • Transition of adult students from basic education to skills training
  • Number of adults served by basic education courses, adult high school, or English language learning courses, courses that combine basic skills and occupational training as a means of expediting basic skills remediation, and the success rate of adults completing such courses
  • Participation in dual enrollment programs
  • Workforce training provided to businesses and individuals
  • Participation in statewide or regional collaboration or efficiency initiatives
  • Training or other services provided to special populations or demographic groups that can be considered unique to the district

 

Wisconsin Technical College System Performance Funding site

2013 Wisconsin Act 20

 

Wyoming

In place at 2-year institutions

$7.15 million will be allocated in FY15 and FY16

Wyoming is currently only using one metric—the course completions for the prior school year at each college as a proportion of the total number of class completions among all colleges.

2014 HB 1

 

Design Tips

Past experiences with performance funding have led to identification of best practices. States that are interested in developing a performance-based funding model may consider the following design tips.

  • Put enough funding at stake to create an incentive for institutions to improve results, and decide whether the funding will come from new money or base funds. Most states are putting aside 5 percent to 25 percent of higher education dollars for performance funding.
  • Allow postsecondary institutions with different missions to be measured by different standards. For example, research universities could be rewarded for research and development performance, while community colleges could be rewarded for workforce training results.
  • Engage all stakeholders—policymakers, higher education leaders and faculty members—in the design of the funding system.
  • Phase in the performance funding system to make the transition easier.
  • Keep the funding formula simple, with unambiguous metrics, so expectations are clear to everyone.
  • Maintain focus on the goal of improving college completion, while rewarding both progress and success. States can reward colleges not only for increased degree production, but also for retaining students year to year and for helping students transfer between institutions.
  • Include a measure to reward colleges that graduate low-income, minority and adult students to ensure that institutions keep serving these populations.
  • Align the funding formula with state economic and workforce needs by providing performance funding to those colleges that are graduating students in high-priority fields.
  • Preserve academic quality by incorporating student learning measurements into the performance funding system.
Share this: 
NCSL will help you Shine
New Members Welcome
We are the nation's most respected bipartisan organization providing states support, ideas, connections and a strong voice on Capitol Hill.

NCSL Member Toolbox

Denver

7700 East First Place
Denver, CO 80230
Tel: 303-364-7700 | Fax: 303-364-7800

Washington

444 North Capitol Street, N.W., Suite 515
Washington, D.C. 20001
Tel: 202-624-5400 | Fax: 202-737-1069

Copyright 2015 by National Conference of State Legislatures