Performance funding doesn’t boost success

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President Obama’s higher education plan praises performance funding in Ohio, Indiana and Tennessee, but two new Community College Research Center (CCRC) studies find “little evidence that performance funding improves student success,” says researcher Kevin Dougherty. “It remains very much in the experimental stage.”

Envisioning Performance Funding Impacts and Performance Funding for Higher Education look at Ohio, Indiana and Tennessee, which have tied substantial higher education funding to student success measures, such as retention and graduation rates.

. . . in states where funding for public colleges and universities is tied to student performance, colleges struggle to pinpoint the causes of poor student outcomes, develop and implement meaningful solutions, and track whether the solutions are improving student success. Additionally, performance funding has the potential to produce strong negative side effects, such as lowered standards, decreased access for at-risk students, and a weakened faculty voice.

“State policymakers tend to assume that if there is enough money on the table, schools will figure out how to get retention and graduation numbers up,” Dougherty says.

But colleges need help to research their problems and find solutions. Without that, there’s a risk they’ll improve their numbers by restricting access and lowering expectations. Performance funding plans should include “financial incentives for enrolling at-risk students and systems to track whether colleges are keeping up academic standards,” Dougherty advises.

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