Outcomes Based Funding and Race in Higher Education

Performance-Based Funding in American Higher Education: A Systematic Synthesis of the Intended and Unintended Consequences

“…Comprehensive universities and community colleges, which enroll disproportionately large shares of historically underrepresented students, are heavily reliant on state funds, yet receive less funding per student when compared to flagship and more-selective colleges (Garcia, 2018; Kahlenberg et al, 2018). PBF systems have been shown to adversely affect minority-serving institutions and other colleges with limited resources, creating the possibility that PBF systems may actually exacerbate educational inequality unless an additional investment is made in improving capacity (Hillman & Corral, 2018; Jones et al, 2017).…”

“…At the same time, however, lesser-resourced institutions are also reliant on state funding and receiving a higher percentage of their overall funding from the state than more-resourced institutions (Desrochers & Hurlburt, 2016). As a result, any funding lost via PBF may exacerbate resource inequities across public colleges and universities by potentially reducing state funds at institutions that are simultaneously heavily reliant on state funds and funded at lower rates (Jones et al, 2017). The extent to which this occurs may be moderated by components of PBF systems that build equity metrics into funding formulas, but absent this equity-focused approach, research on PBF policies indicates that PBF exacerbates the funding disparities that exist across institutions.…”

“…Administrators at many public colleges have expressed concern with how the adoption of PBF policies may limit their capacity to serve all types of students, and their concerns have been heightened when discussing students who are more expensive to educate, such as low-income and academically underprepared students (Jones et al, 2017). Given these equity concerns, legislators and policymakers from numerous PBF-adopting states have included equity measures in an effort to support access- and success-oriented initiatives for students from historically underrepresented and traditionally disadvantaged groups (Boelscher & Snyder, 2019; Cielinski & Pham, 2017).…”

“…A number of empirical studies have shown that colleges became more selective or changed their financial aid practices to recruit more affluent students in response to PBF adoption (Dougherty et al, 2016b; Kelchen & Stedrak, 2016), including one that meets our criteria for providing credible evidence regarding the impacts of PBF (Umbricht et al, 2017). Second, more descriptive as well as strong quasi-experimental evidence indicates that PBF threatens to further widen the resource gap between colleges and universities that enroll larger numbers of racial minority and low-income students and institutions that primarily enroll students from more advantaged backgrounds (Hagood, 2019; Jones et al, 2017; McKinney & Hagedorn, 2017).…”

Minority Serving Institutions: A Data-Driven Student Landscape in the Outcomes-Based Funding Universe

“…Until 2016, NCES counted only first-time degree seekers in their calculations for graduation rates. Metrics such as graduation rates are a common variable used in performance-based funding to state-affiliated colleges and universities (Jones et al, 2017). However, due to the distinct profile of students attending MSIs, many of whom transfer between or leave and re-enter institutions, such metrics lead to unfair judgments of these institutions' success.…”