More States Utilize Performance Funding For Higher Education: Student Success At Community Colleges And Elsewhere Is Tied To Funding, But Academics Are Wary.

Ann McClure's picture
Tuesday, February 28, 2012

You get what you pay for, the saying goes. A growing number of states are linking higher education dollars to student success, not just enrollment.

Performance funding is being adopted or strengthened in a majority of U.S. states, says Jamie Merisotis, CEO of Lumina Foundation for Education, which is funding research and grants to states developing new funding models. (Disclaimer: Lumina Foundation is also among the many funders of The Hechinger Report, for which I write.)

The Obama administration is encouraging states to reward colleges and universities for graduating greater numbers of students and preparing them for high-demand jobs.

Paying for performance isn't a new idea: Twenty-six states adopted performance funding--usually in the form of small bonuses--between 1979 and 2007, according to the American Association of State Colleges and Universities. Half of those states, though, cut the bonuses when state budgets tightened.

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