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

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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