College-Dropout Crisis: Design Performance-Based Funding More Carefully

Aug 21, 2018 by

Performance-based school-funding systems are a good idea in theory, but they need to be more carefully designed, to discourage chicanery.

The troubling dropout rate across American colleges and universities is starting to get the attention it deserves. Earlier this year, always eager to mobilize the armies of social reform, the New York Times declared “a new dropout crisis.” As 2 million students drop out of college each year, the costs should give everyone pause — including a half-trillion dollars in unpaid student debt and public subsidies wasted on college-goers who never graduate.

Policymakers have sought to answer the challenge, with most states adopting performance-based funding policies. Currently, 32 states allocate a portion of their higher-education funding based on educational outcomes. Ohio, for instance, allocates more than half of its funding to colleges based on how many students earn degrees. Other common metrics including retention and job-placement rates.

There’s a lot to like in these efforts. For one thing, they have been fueled by state policymakers rather than mandates from Washington. For another, at a time when tuition costs keep rising and concerns about academic quality keep proliferating, performance-based funding could bring healthy accountability to higher education. It makes sense that colleges that successfully graduate more students should receive additional state aid, while those with higher dropout rates receive less. This promises to align incentives so that institutions have a stake not just in enrolling students but in seeing that more of them actually complete their degrees.

Source: College-Dropout Crisis: Design Performance-Based Funding More Carefully | National Review

Print Friendly, PDF & Email

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.