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Performance Funding for Higher Education: Forms, Origins, Impacts, and Futures

By Kevin Dougherty, Sosanya Jones, Hana Lahr, Rebecca Natow, Lara Pheatt & Vikash Reddy
Since the 1970s, federal and state policy-makers have become increasingly concerned with improving higher education performance. In this quest, state performance funding for higher education has become widely used. As of June 2014, 26 states were operating performance funding programs and four more have programs awaiting implementation. This article reviews the forms, extent, origins, implementation, impacts (intended and unintended), and policy prospects of performance funding. Performance funding has become quite widespread with formidable political support, yet it has also experienced considerable implementation vicissitudes, with many programs being discontinued and even those that have survived encountering substantial obstacles and unintended impacts. Although evidence suggests that performance funding does stimulate colleges and universities to substantially change their policies and practices, it is yet unclear whether performance funding improves student outcomes. The article concludes by advancing policy recommendations for addressing the implementation obstacles and unintended side effects associated with performance funding. This article appears in The ANNALS of the American Academy of Political and Social Science, vol. 655, no. 1.
View article (subscription may be required)
September 2014
  • Implementation and Impacts of Performance Funding in Three States

Related Publications

July 2013

Performance Funding for Higher Education: What Are the Mechanisms? What Are the Impacts?

Additional Resources

For more policy briefs and fact sheets, visit CCRC’s Policy Resources page.

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