Previous studies have shown that state performance funding policies do not increase baccalaureate degree production, but higher education scholarship lacks a rigorous, quantitative analysis of the unintended consequences of performance funding. In this article, we use difference-in-differences estimation with fixed effects to evaluate performance funding in Indiana. We find that performance funding did not increase the number of graduates and instead led to declining admission rates and increased selectivity at Indiana's public universities. When compared with surrounding states, we find limited evidence that the effects of performance funding could disproportionately limit college access for Indiana's low-income and minority applicants.

This systematic synthesis examines the intended and unintended consequences of performance-based funding (PBF) policies in higher education. Within this synthesis, we focus particularly on evidence from research studies with strong causal inference designs in an effort to understand the impacts of these policies. PBF adoption is generally associated with null or modest positive effects on the intended outcomes of retention and graduation, but there is also compelling evidence that PBF policies lead to unintended outcomes related to restricting access, gaming of the PBF system, and disadvantages for underserved student groups and under-resourced institution types. PBF policies including equity provisions for colleges that enroll or graduate underserved student groups have been found to offset some of these unintended consequences. Based on this synthesis, we offer policy recommendations and directions for future research on PBF policies, including the need to consider variation in policy design and the broader state policy context.

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In 2010, Tennessee enacted the Complete College Tennessee Act (CCTA), which increased the proportion of state performance-based funding from 5.45% to 85% and added a 40% funding premium for progression and

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