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Does Performance-Based Funding Affect Colleges’ Financial Priorities?

Does Performance-Based Funding Affect Colleges’ Financial Priorities? abstract: State-level performance-based funding (PBF) policies are an increasingly common way to allocate funds to public colleges and universities. While a growing body of research has examined whether these policies are effective in improving student outcomes, little is known about how colleges respond to PBF policies. In this paper, we examine whether two-year and four-year colleges subject to PBF change their patterns and allocations of revenues, expenditures, and financial aid. We find limited evidence that colleges facing PBF receive different levels of revenue or reallocate some funds to different expenditure categories. Notably, colleges subject to PBF receive less Pell Grant revenue than colleges not subject to PBF, suggesting potential strategic behaviors targeting students from higher-income families. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Education Finance University of Illinois Press

Does Performance-Based Funding Affect Colleges’ Financial Priorities?

Journal of Education Finance , Volume 41 (3) – Apr 6, 2016
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Publisher
University of Illinois Press
Copyright
Copyright © University of Illinois Press
ISSN
1944-6470
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Abstract

abstract: State-level performance-based funding (PBF) policies are an increasingly common way to allocate funds to public colleges and universities. While a growing body of research has examined whether these policies are effective in improving student outcomes, little is known about how colleges respond to PBF policies. In this paper, we examine whether two-year and four-year colleges subject to PBF change their patterns and allocations of revenues, expenditures, and financial aid. We find limited evidence that colleges facing PBF receive different levels of revenue or reallocate some funds to different expenditure categories. Notably, colleges subject to PBF receive less Pell Grant revenue than colleges not subject to PBF, suggesting potential strategic behaviors targeting students from higher-income families.

Journal

Journal of Education Finance – University of Illinois Press

Published: Apr 6, 2016

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