Recommendations for the Effective and Equitable Implementation of Performance-Based Funding for Wisconsin Higher Education

Historically, the state’s colleges and universities have received state appropriations based on funding formulas that reflect a combination of student enrollment at the beginning of the fall semester, mission-specific funding, and funding received in past budget cycles. While this approach helps provide stability and fiscal certainty for educational institutions, it also includes a potentially perverse incentive to focus on enrolling students rather than graduating them. Drawing on the latest empirical evidence, the report aims to provide a fair treatment of the potential benefits and costs of a PBF approach to funding higher education in Wisconsin. Then, it points out forth several recommendations aimed at ensuring the effective and equitable implementation of a PBF model, with the hope that a carefully designed and thoughtfully executed effort will lead to successful outcomes for all adults seeking a postsecondary education in the state.