Performance funding for higher education has evolved significantly since its introduction in 1979 in Tennessee. Over the years, this funding model has been adopted by 26 additional states, each implementing a unique approach to improve institutional performance and student success. This monograph serves as a comprehensive review of research from various states, addressing critical questions about the effectiveness and challenges of performance funding.

This monograph provides a critical analysis of the performance funding model, highlighting both its potential benefits and its limitations. The research indicates that while performance funding can lead to significant changes in institutional practices—such as improved accountability and strategic planning—the actual benefits to student outcomes may be less pronounced. This raises important questions about the true effectiveness of performance funding as a tool for enhancing student success.

Furthermore, the study delves into the obstacles that institutions face when implementing performance funding. These challenges can include a lack of clear metrics for success, resistance from faculty and administration, and potential inequities in funding distribution. Moreover, the unintended consequences of performance funding can create disparities among institutions and affect the populations they serve.

The monograph concludes with a discussion on the implications for future research and public policymaking. It emphasizes the need for ongoing evaluation of performance funding initiatives and suggests that policymakers should consider the complexities of institutional dynamics and student demographics when designing funding models.

The 2nd issue of the 39th volume of the Jossey-Bass series, ASHE Higher Education Report, this publication represents a definitive analysis of a challenging higher education issue. Each monograph in this series is based on thorough research of pertinent literature and institutional experiences, with topics identified through a national survey.

Noted practitioners and scholars have been commissioned to write these reports, ensuring that the findings are credible and well-supported by expert reviews. This collaborative approach guarantees that the insights presented are both practical and relevant to the ongoing discourse in higher education.

In summary, this monograph is an essential resource for anyone interested in understanding the mechanisms and impacts of performance funding in higher education. It urges stakeholders to reflect on the findings and consider the implications for future funding strategies, with the ultimate goal of improving outcomes for students across the country.