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ERIC Number: ED561331
Record Type: Non-Journal
Publication Date: 2015-Nov
Pages: 15
Abstractor: ERIC
Reference Count: 17
Placing Student Success at the Center of State Higher Education Finance Policy. Lumina Issue Papers
Labi, Aisha
Lumina Foundation for Education
What does it take to make it successfully through college? For a growing proportion of the nation's students--many of whom are racial and ethnic minorities, from low-income families, or the first in their families to enroll in higher education--the answer encompasses far more than affordable tuition and decent grades. As access to higher education has expanded to embrace these historically underrepresented groups, the formula for student success is increasingly understood to include a mix of programs and incentives tailored to their needs. Legislators are taking notice. Their primary policy objective in financing higher education was once to increase student enrollments. As their focus shifts beyond enrollment to attainment levels and gaps among underrepresented populations, states are developing outcomes-based funding models, which recognize that underrepresented students may require additional academic, financial, and social support to achieve success, and which allocate funding to institutions as a way to further promote a culture of student progression and success. As participation rates in higher education have increased across social and economic groups and non-traditional students have become the norm, the hurdles to success have multiplied for the students themselves and for the institutions that serve them. Outcomes-based funding is a relatively new approach to higher education financing based on the idea that colleges and universities should be supported to do more to foster student success. As public funding has become more constrained and attainment rates have fallen, the question of whether higher education is providing appropriate returns on public investment has become increasingly urgent. As more and more students fail to make timely progress toward a degree, drop out altogether, or do not succeed in finding jobs that leverage their degrees, attention has focused on tools policymakers can use to encourage those outcomes. Outcomes-based funding models are increasingly seen as an effective way to foster the efforts of colleges and universities to assist students once they are enrolled and to help them progress toward graduation. Such funding allocation models have been embraced by a growing number of states, with varied levels of investment and design. In contrast with a traditional funding model based on enrollments, or even a model that allocates a portion of funding based on key performance indicators, outcomes-based funding is a comprehensive model in which all or a substantial part of an institution's funding allocation is oriented toward achieving the state's desired outcome. Experts agree that while it's too early to assess the effectiveness of the state's outcomes-based funding model at increasing attainment, the changes it has ushered in have led to meaningful achievements.
Lumina Foundation for Education. P.O. Box 1806, Indianapolis, IN 46206-1806. Tel: 800-834-5756; Fax: 317-951-5063; Web site:
Publication Type: Reports - Descriptive
Education Level: Higher Education; Postsecondary Education
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: Lumina Foundation for Education
Identifiers - Location: California; Indiana; Ohio; Tennessee