New studies: performance based funding doesn't work

In his first budget, Wisconsin Governor Scott Walker slashed the Wisconsin Technical College System's (WCTS) state funding by 30% or $70 million. This year he restored $5 million that will be allocated on "performance measures."

Performance based funding has become a national trend. Across the country Governors and legislatures are rushing to adopt systems that allocate funds to colleges based partly or heavily on performance indicators rather than enrollment, as has historically been the case.

But a new round of research on such programs suggests that these programs generally do not work.

According to Inside Higher Ed: 

Several papers presented at the annual meeting of the Association for the Study of Higher Education explored what Michael McLendon of Southern Methodist University called the performance-based funding "craze," which has become a widely embraced and copied strategy for governors and legislators trying to improve the effectiveness and efficiency of their public higher education systems at a time when they lack either the money (or the will) to spend more on them....  

The session at which three papers were presented broadcast their overall findings in its title: "The Myth of Performance-Based Funding." One paper, by Tiffany Jones of the Southern Education Foundation, examined the extent to which historically black colleges are especially likely to be hurt by state policies that link funding to simple metrics (like graduation rates) that don't take into account the academic preparation of colleges' students and their levels of institutional funding.

Another, prepared by a group of scholars affiliated with the Community College Research Center at Columbia University's Teachers College, examined the goals and policy approaches of performance-based funding systems and concluded that they are sometimes ill-defined and overly narrow, and that they too rarely anticipate (and try to guard against) unintended consequences that can result.

A third paper looked much more directly at what the performance-based programs are accomplishing. The authors, David Tandberg and Mohamed Barakat of Florida State University and Nicholas Hillman of the University of Wisconsin at Madison, examined performance-based systems in 19 states and found that while those programs were largely designed to increase the number of students completing associate degrees, it did so in only four of them. In six states completions actually declined, and in nine others, the patterns were inconclusive.

Another study by the same authors uncovered similar results for bachelor's degree productivity, with a positive impact in four states, a negative effect in four, and no effect whatsoever in 12 others.

"There is no meaningful evidence of effectiveness, but we see a rush toward adoption," said Tandberg, an assistant professor of higher education at Florida State. "It seems as though there is something other than evidence at work here."

What may be at play, said Kevin J. Dougherty, an associate professor of higher education at Teachers College, is that states may be feeling pressure to "jump on the bandwagon" so as not to appear to be "laggards in the competition for effective policy."

That is especially true, he and others said, given that outside groups like Complete College America and the National Center for Higher Education Management Systems are aggressively advocating for performance funding, framing it as an "attractive policy that seems to fit this time of constrained finances."

"...if these authors have it all right, the weight of the evidence is against performance funding," McLendon said. At a time when policy makers are expressing a desire to make decisions based on data, and "increasingly asking researchers like those at ASHE to give them research that has real-world policy consequences, it will be an interesting collision of wills when research about the failure of performance funding meets the ideological commitment of states to move forward with it."

Read the entire Inside Higher Ed article here: http://www.insidehighered.com/news/2013/11/18/studies-question-effectiveness-state-performance-based-funding#ixzz2lNwF8BsJ
Inside Higher Ed