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,…

The literature on funding formulas for higher education is reviewed, and the historical roots of state higher education funding relationships is traced, including three 20th century budget reform movements that were the antecedents of formulas. Attention is directed to conditions that will affect funding of higher education and formula responses…