Executive Briefing: Performance Funding and Outcomes-Based Funding for Student Success in Higher Education

What Is It?

For public institutions, performance funding and outcomes-based funding occur when states tie portions of their higher education appropriations to student outcomes. This strengthens accountability and aligns state investments in higher education with how well students succeed in their studies during and after completing their credential.

• Rather than relying primarily on enrollment numbers or other inputs, states increasingly are using metrics reflecting student success outcomes across various domains in their allocations of higher education funding. These metrics form the bases of performance funding or outcomes-based funding.