Equity Measures in State Outcomes-Based Funding: Incentives for Public Colleges to Support Low-Income and Underprepared Students

As many states transition from enrollment-based funding for community and technical colleges to outcomes-based or performance-based formulas, they should consider the impact that such changes will have on low-income or underserved student populations. One concern is that funding formulas that heavily weight student outcomes may incentivize colleges to be more selective with their admissions requirements, thus erecting barriers for many students to access higher education.

This report from the Center for Law and Social Policy (CLASP) outlines how states can encourage equity through their community and technical college systems by including equity measures in their outcomes-based funding formulas. The paper discusses four dimensions of equity measures: population, type of equity measure, optionality and weighting. The authors recommend that states use this classification to assess and identify equity measures in their own outcomes-based funding formulas and adopt such measures if they are not already included. They also suggest that states adjust the formula weights to counteract selectivity and encourage more open access to postsecondary education.

Also included is a self-assessment tool for states to determine which, if any, equity measures are present in their own postsecondary funding formulas. 

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February 2017