Examining the Impact of Variations in Performance-Based Funding Policies on Reducing Inequality in Student Outcomes

How have performance-based funding policies varied across states and institutions over the past twenty years?

Black and Latino students are less likely to attend or graduate from college than their White peers. Gaps also exist between low-income and high-income college students in their persistence and graduation outcomes. In response, a growing number of states are prioritizing racial minority and low-income students when developing funding models to improve performance and reduce inequality in educational attainment. Research to date offers conflicting conclusions about whether these performance-based funding (PBF) policies align with some states’ efforts to reduce inequality in educational attainment or actually reduce access for historically under-represented students. Ortagus and colleagues will create a comprehensive state- and institution-level policy dataset that represents variation in 20 years of performance-based funding policies across 35 states. Using procedures already in place to construct a dataset from publicly available records, the team will construct two datasets on PBF policies since 1997. One will contain state-level information on PBF policies, such as the dosage or intensity of a PBF policy (e.g., share of funding tied to performance) and the share of funds allocated toward equity bonuses. The second will break down PBF details to the institution level and will contain data on institutional characteristics, their reliance on public funding, and student outcomes. This effort will provide detailed data that will allow researchers to more accurately analyze the degree to which PBF policies, which tie a portion of state appropriations for public colleges and universities to student outcomes, exacerbate or reduce income and racial/ethnic disparities in college persistence and graduation outcomes. Ultimately the investigators aim to examine the impact of variations in PBF policies on college access, graduation, and post-college outcomes over time, particularly for historically underrepresented student populations.