Performance Funding of United States' Public Higher Education

Abstract

Policy makers around the globe are responsible for decision regarding the funding of higher education and the benchmarks of success. This chapter is geared toward higher education administration and leadership, especially those who shape policy in this arena. This quantitative study examined the effectiveness in the United States of allocating state resources to state public institutions of higher education by investigating the rate of change in the current benchmarks of success, which are graduation and retention rates. The findings revealed that the method of funding was not a statistically significant predictor of either the initial status or the rate of change of graduation rate or retention rate over the eight-year period, although institution type and enrollment were. The study recommends further research of performance funding outcomes, state funding levels, and other environmental factors as a means of helping administrators and policy makers in their quest to facilitate economic progress through an educated citizenry.