The Impact of Performance Funding Policy Design on College Access and Selectivity

InformEd States / November 2021

Thirty-three states have enacted performance-based funding (PBF) that ties public four-year college funding to student outcomes. Research indicates PBF has led to restricted access and increased selectivity. However, we know less about how variations in PBF (e.g., the share of funds at stake and the subpopulations targeted in equity metrics) shape outcomes, particularly at minority-serving institutions (MSIs). This study draws on the most comprehensive PBF dataset and incorporates recent econometric advances to examine how features of PBF shape college access and selectivity. The authors find some evidence of decreased enrollment among racially minoritized and low-income students at highly selective colleges and MSIs with low-dosage PBF. They find equity metrics are not enough to boost enrollment among targeted subpopulations.