How Outcomes-Based Funding Will Affect Students and Professors

Oct 20, 2021

By Erin Tigro


About Outcomes-Based Funding

This new plan, which was passed by the Texas House and Senate, calls for public universities and community colleges to meet specific educational objectives in order to receive state dollars. The goal is to increase graduation rates, with an emphasis on graduating individuals in critical needs areas, such as math and science education, engineering, science, mathematics and nursing, as well as at-risk students. This is not a new concept; in fact, outcomes-based approaches in higher education were popular in the '80s and '90s and continue to be used in a few states, including Pennsylvania, Ohio and Tennessee. Texas is not alone when considering this approach; several other states have been exploring methods of implementation, including South Carolina, Virginia, Connecticut and Arkansas.

Outcomes-Based Funding and Students

According to the Texas Higher Education Committee Board, less than 60% of university-level college students earn a degree within six years of starting school, and many quit before they earn their diploma. From 2003-2009, students who left college before completing wound up with over $10,000 in student loans with nothing to show for it. In Tennessee, a state that focuses on outcomes and completion rates, schools offer more remedial classes as well as a wealth of tutoring services for students who need them. In addition, Tennessee college students have benefitted from a greater number of academic advisors and more comprehensive counseling services.

Outcomes-Based Funding and Professors

Outcome- or performance-based funding can be seen as a negative by some - a way to push underperforming students through courses just to make quotas or take money away from larger schools who currently receive more funding because of higher enrollment rates. However, the proposed Texas bill is not looking to dramatically change current allocations. The outcomes-based approach would only call for ten percent of all funds allotted to schools, leaving the method for how the remaining 90% is distributed unchanged. A 2011 higher education policy brief by the American Association of State Colleges and Universities indicated that in colleges and universities that have implemented this type of system, there has been an increase in faculty productivity and overall quality of educational programs.

Continue reading for information on public university funding trends.

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