Outcomes-Based Funding: Taking Stock

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, "Outcomes-Based Funding: The Wave of Implementation" (2013) described features of models being implemented in states and the extent to which they conformed to the principles presented in the first paper. This third paper documents the continued spread of adoption with an increased focus in the field on whether outcomes are equitable across populations, with states disaggregating results by race, ethnicity, age and income and reporting those publicly. The additional purposes of this paper are threefold: (1) To reinforce the point that outcomes-based funding is but one component of the overall financing model for higher education in a state. The power of outcomes-based funding models is enhanced if the other components are designed so as to strengthen the alignment between funding streams and desired results; (2) To once again revisit the lists of design and implementation principles presented in the earlier document and (slightly) revise them in light of states' actions and experience; and (3) To describe the models that are being employed in implementing states and to assess the extent of conformance with the proffered set of design and implementation principles. This for the purpose of identifying areas of non-conformance to catalog potential weaknesses in models and questioning the applicability of certain of the principles. As with earlier versions of the document, the ultimate objective is to provide clear, straightforward guidance to policymakers who are searching for ways to better align their approaches to resource allocation with the educational outcomes that are of highest priority in their state.