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Resources by Topic: outcomes-based funding

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Outcomes-Based Funding Strategies for Postsecondary Education

An Inspiring Story

March 6, 2018

This brief tells the story of Indiana’s efforts to develop and implement outcomes-based funding (OBF) for public postsecondary education. Indiana’s story is supplemented by a briefer description of efforts in Tennessee. Based primarily on interviews with key state leaders, this story is designed to highlight the unique path each state took to implement funding policies that can help increase educational attainment beyond high school, improve equity in student outcomes, and inspire ideas for leaders in other states.

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Taking Stock of Outcomes-Based Funding

Policy Snapshot

October 2, 2017

Concerned with low on-time graduation rates, some state lawmakers are turning to outcomes-based funding as one policy approach to support postsecondary degree attainment and workforce goals. This report from the Education Commission of the States defines and explores outcomes-based funding, and provides summary information on 2016 and 2017 legislative activities.

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Outcomes-Based Funding and Responsibility Center Management

Combining the Best of State and Institutional Budget Models to Achieve Shared Goals

July 13, 2016

State governments serve as a key-funding source for public higher education. Outcomes-based funding is an alternative to other methods of state allocations to institutions, such as base-plus funding, enrollment-based funding, and early performance-centered funding. Outcomes-based funding allows states to convey and promote alignment with goals and objectives for higher education by allocating state tax dollars to institutions based on measures of outcomes.

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Using Real-Time Labor Market Information to Achieve Better Labor Market Outcomes

July 13, 2016

Understanding complex labor markets including the demand for skills is key to guiding our investments in education and training. This is especially true for community colleges responsible for preparing a significant portion of the nation’s workers. These institutions are being increasingly challenged to better align their programs of study with entire economies undergoing restructuring and with most workplaces escalating their skill requirements. Policy questions surrounding higher education funding formulas, measures of performance and institutional rating systems are all seeking more focus on labor market outcomes.

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Connecting State and Institutional Finance Policies for Improved Higher Education Outcomes

July 13, 2016

This paper provides a conceptual framework that examines the interrelationship between state and institutional finance policies, including state appropriations, tuition and financial aid. It explores how state higher education goals can be advanced through outcomes-based funding policies that provide incentives for institutional behavior, and how policies can be designed to maximize student success.

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Aligning Student and Institution Incentives in Higher Education Finance

July 13, 2016

Higher education, depending who you talk to, is a generator and transmitter of knowledge, a provider of opportunity and social mobility, a trainer of skilled workers for employers, a driver of economic development or any or all of the above. But alongside its lofty goals, it is also a big, complex $600 billion business that provides paychecks to four million people.

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Leveraging Outcomes-Based Funding Policies at the Institutional Level

July 13, 2016

Policymakers are moving to outcomes-based funding in an effort to inspire public higher education institutions to drive the transformative change required to expand access, increase graduation rates and contain costs. For outcomes-based funding to have a significant effect on student outcomes, system and institutional leaders must successfully translate these policies into action. In an effort to inform the design, development and implementation of future outcomes-based funding policies, this paper presents a real-time account of how the prospect of outcomes-based funding, and the financial incentives that have been put in place by the state of California and the California State University system, have provided a frame for California State University, Fullerton to engage and mobilize its campus community to improve student outcomes, advance the institution’s mission and achieve its strategic goals.

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Early Results of Outcomes-Based Funding in Tennessee

March 10, 2016

No state has done more than Tennessee to shift state higher education funding to reflect outcomes rather than inputs. In other states, most of the core funding for higher education, including tuition and state appropriations, flows to colleges based on student enrollment.

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Structuring State Policy for Student Success

Applying Incentives in the Volunteer State

March 10, 2016

This is a time of great challenge and opportunity for American higher education. The challenges are well-established and widely acknowledged: escalating standards for economic competitiveness, coupled with a severe economic downturn and protracted recovery, require broad access to relevant postsecondary education, training and retooling as never before, but stagnant state funding and surging student demand have tightened the tension on an already cash-strapped public system. The lagging economy limits tax collections, which are an important stream of unrestricted revenue for public institutions. Faced with doing more with less, campuses respond by raising tuition, fees or both, while cutting costs in a variety of ways, often affecting personnel, services and quality.

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Employing Postsecondary Data for Effective State Finance Policymaking

March 10, 2016

Each year, more states are adopting policies to incent and support improvements in postsecondary student success and equitable outcomes through the effective use of quality data. Particularly as the target dates for national higher education attainment goals grow nearer, state economies are in need of more college-educated workers, and budgets continue to be severely constrained, many state leaders are recognizing the need to improve the productivity, completion efficiency and equity of their higher education systems.

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