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Popular But Unstable: Explaining Why State Performance Funding Systems in the United States Often Do Not Persist

By: Kevin Dougherty, Rebecca Natow & Blanca Vega

Abstract

Performance funding in higher education ties government funding to institutional performance on indicators such as retention, graduation, and job placement. Performance funding can also be found in state K-12 funding policies and higher education quality assurance programs abroad.

One of the puzzles about higher education performance funding is that half of the states that established it later abandoned it. This study examines the factors that have led many states to drop performance funding for higher education. It contrasts the experiences of three states that dropped performance funding in whole or in part (Missouri, Washington, and Florida) and a fourth (Tennessee) that has retained it more than 30 years.