The use of performance funding, which provides institutions with income for educational results, was tested in Tennessee. Traditionally, the budget has been separated from performance evaluation, and state formulas have evolved from the need for funding to be objective, comparable, and predictable. The Performance Funding Project in Tennessee,…

The Tennessee Higher Education Commission's (THEC) use of a performance criterion in funding higher education is discussed, along with the results of evaluating this initiative. Information on program quality and improvement efforts is a factor in determining the budgetary allocation for each state institution. With funding from the Kellogg…