Performance-based funding – a policy in which states fund public colleges based on certain student outcomes, such as how many students graduate – hasn’t benefited all students equally in Tennessee and Ohio. That’s according to a study in which we analyze U.S. Department of Education data on public colleges and universities in these states between 2004-2015.
We compared institutions in Ohio and Tennessee to institutions in states that did not have performance-based funding policies during the same time frame. In some cases, Black, Hispanic, Native American and Alaska Native students did in fact earn more certificates as well as associate and bachelor’s degrees. However, the gap between them and white and Asian students grew even wider for bachelor’s degrees in Ohio and for certificates in Tennessee.
Performance-based funding is different from other college finance models. Historically, public colleges have been often funded based on how many students they enroll, not how many they graduate.