eAIR spoke with Robert Kelchen, Assistant Professor, Education Leadership, Management, and Policy, Seton Hall University, about a new grant that will study the effects of variations in performance-based funding policy designs on access, completion, and labor market outcomes.

eAIR: Congratulations on your grant! In regard to higher education, what is performance-based funding?

Thank you! Performance-based funding, or PBF, (also called outcomes-based funding) is an effort by state policymakers to tie at least a portion of state funding for public colleges or universities to student outcomes such as the number of credentials completed. Most of states' support for higher education is based on a combination of enrollment and prior funding levels, but tying at least some funding to student outcomes is becoming more popular in an era of skepticism of higher education and efforts to hold colleges accountable for their performance.

eAIR: Currently, how widespread are performance-based funding policies? Do you see them becoming more prevalent?

At least 30 states currently have PBF policies on the books, with more states having conversations about adopting these policies. I see them becoming more prevalent, especially as states across the political spectrum have recently adopted or discussed adopting PBF. In talking with policymakers, the message is clear: don't expect new state funding for higher education without at least some money being tied to outcomes.

eAIR: Since the project announcement in December of 2018, how has the study evolved and what questions do you hope to answer in terms of how student success is impacted by performance-based funding?

Kelly Rosinger, Justin Ortagus, and I have been working together on this project since late 2017 before going public with our support from the William T. Grant Foundation in late 2018. We are currently working with our team of research assistants to collect detailed data on the outcomes states are incentivizing and the amount of money tied to particular outcomes. (Readers working with state higher education agencies may be getting a note from us with some questions about particular policy details!) This advances the body of research beyond comparing states with and without PBF systems by allowing us to dive into the implications of particular policy details about whether provisions designed to increase the number of students from historically underrepresented groups are effective and whether the amount of funds tied to outcomes is associated with changes in institutional behaviors. Broadly speaking, we will study the effects of these variations in policy designs on access, completion, and labor market outcomes.

eAIR: When do you anticipate that the study will conclude? What kind of results will be available to stakeholders and other interested parties (report, dataset, infographic, etc.)?

We see this study continuing for the next several years because of the time consuming nature of data collection and the number of outcomes to examine. We plan to make our dataset public later this year and intend to release a series of reports and graphics over the next several years. Our goal is to help state policymakers make more data-driven decisions on PBF policies and provide the research community with the types of data needed to answer a variety of research questions on PBF.