Dive Brief:

• The Lumina Foundation released a batch of five new policy papers that explore outcomes-based funding models in Tennessee and Texas.
• In announcing the release, the foundation reports Tennessee’s outcomes-based model has reframed institutional practices, leading to at least early signs of student success, while Texas’ model seems less promising.
• One of the latest papers advocates developing better ways to measure student learning to achieve more equitable outcomes and assess the educational quality of individual colleges.

Dive Insight:

Outcomes-based funding models are seen as a way for policymakers to motivate colleges to improve attainment, including among low-income and underrepresented minority groups. More than 30 states tie at least a portion of state funding to performance-based measures. This is in contrast to historical funding models that rewarded institutions for enrollment alone. The shift is from providing access to ensuring success. But some worry the focus may disincentivize broad access.

If colleges are penalized for failing to support certain groups, they could stop accepting students from those groups. In Tennessee, policy is focused on statewide college attainment rates, which require success from all groups. This seems to prevent such an unintended consequence.