This chapter describes a comprehensive set of best practices for the evaluation of state formula funding models and state higher education funding in general, based on existing practices within the United States. It represents a review of practices that lead to stakeholder engagement as an objective, collaborative process.

The United States cannot meet its higher education goals without changing the way it funds public colleges and universities. Current funding models do not sufficiently advance fully scaled improvements. Instead, today's models create unfunded mandates: Colleges are required to increase completion rates, but they do not receive essential funding…

This paper analyzes the incentives induced by a formula to fund universities based primarily on enrolment. Using a simple game theoretical framework, we argue that the strategic behaviour induced by those formulas is to favour enrollment. We further argue that if the funding value differs by enrolment type, it introduces incentives to substitute…

Operating revenue for public higher education is derived from several sources, such as state appropriations, tuition, room and board, and contracts. State funding in particular constitutes a large share of revenue and is consequently critical for improving enrollment, completion, and labor market outcomes. However, states differ in how…

The primary purpose of this study was to examine how best a Tennessee 4-year public university can perform under the state's outcomes-based funding formula, most commonly identified as either PF 2.0 or the Complete College Tennessee Act (CCTA) funding formula. Using a mixed methods approach, the research analyzed select input variable performance…

Budgets do not only pay the costs of activities. They also reveal the ambitions and limitations of an organization. The opportunities presented in a budget are also bounded by the structural elements used by that institution: how costs and revenues are organized, how overhead is calculated and apportioned, and how assets and investments are…

Policy implementation research suggests that the likelihood of policy success, i.e. matching policy outcomes with expectations, can be best assessed by engaging the bottom-up perspectives of those who will implement the policy. This paper works from this premise and examines the views of university leaders in Kazakhstan on the potential impact of…

This is the third paper on the topic of outcomes-based funding written by Dennis Jones for Complete College America. The first paper, "Performance Funding: From Idea to Action" (ED535356), proposed a set of design and implementation principles to help states develop and implement their own outcomes-based funding models. The second paper,…

While many policymakers see college credit attainment programs as potential cost savings, little research has examined the actual savings (if any) tied to taking college classes in high school. This Rapid Response brief helps fill the gap, investigating and comparing the costs of providing college credit in high school in three states with the…

Developing countries place a high premium on education because it is believed to correlate with economic development. Similarly, Botswana adopted an education-for-development policy when it became independent in 1966. Providentially, it discovered and mined minerals, particularly diamonds, and funded education. Unfortunately, Botswana is a…

Performance-based funding (PBF) models intend to increase efficiency and productivity of the institution, thereby influencing organizational change. This change may be structural, programmatic, or procedural, and it may affect institutional practice and/or policy. The purpose of this qualitative case study was to understand the organizational…

The Massachusetts community college system is entering a second year with funding for each of its 15 schools determined using a new performance-based formula. Under the new model, 50% of each college's allocation is based on performance on metrics related to enrollment and student success, with added incentives for "at-risk" students…

Students need learning experiences connected with the world of work to equip them to enter the workforce and secure good jobs. This report provides an overview of funding for career and technical education and a detailed look at Career and Technical Education (CTE) funding models in Arkansas, Indiana, Ohio, Oklahoma, South Carolina and West…

Purpose: The purpose of this paper is to assess the research efficiency of the Chilean higher education institutions (HEIs). As it has been argued in the literature, universities in Chile are far from being considered research-oriented institutions. Current governmental reforms have put pressures on the efficient use of public resources,…

In 2011, state legislators in Arkansas passed Act 1203, effectively enacting performance-based funding models for all state-run institutions of higher education. Over a period of five years beginning in 2013-14, 25 percent of every institution's base funding will be allocated according to performance. Under the direction of the Arkansas Department…