Across the country, higher education institutions are squeezed against each other for limited public funding. Colleges and universities subject to performance-based funding (PBF) models have had mixed results and some are skeptical about its long-term viability. This article seeks to present the origins and highlights some results of PBF models. Say no to plagiarism. Get a Custom Essay on “Why Violent Video Games Should Not Be Banned”? Get an Original Essay With a first appearance at the Tennessee Commission of Higher Education, early forms of performance-based funding (PBF) have began to take off in 1978 and the mid-2000s, reaching at least 26 states having practiced such policies (Harnisch, 2011). Compared to the measures of the current PBF model; planning and design, measurement indicators, and amount of funds provided highlight some of the differences from their historical counterparts (Thornton and Friedel, 2016). However, the original PBF methods placed more emphasis on completion and transfer rates, leaving galvanized advancement and preservation initiatives neglected (Dougherty & Natow, 2010). Original studies of PBF were also found to be more directly related to overall program effectiveness rather than student outcomes or institutional performance (Dougherty & Reddy, 2011). Additionally, initial PBF plans were designed and implemented without support from education officials, leading to a disconnect between state policy and educational institutions' missions (Thornton & Friedel , 2016). Due to the inability to motivate educational institutions to change, the original PBF methods were abandoned (Miao and Ju, 2012). In Florida, universities are rated in a range of ten categories, including: first-time college entry (FTIC) retention rate with a cumulative GPA above 2.0, FTIC 6-year graduation rate, 4-year AA transfer degree graduation rate, percentage of bachelor's degrees with excessive hours, percentage of bachelor's degree graduates employed full-time or in higher education, bachelor's degrees in STEM (Science, Technology , engineering, and mathematics), graduate degrees in STEM fields, average cost per bachelor's degree, median salaries of bachelor's degree graduates, and number of bachelor's degrees awarded to minorities (Frank, 2016). For the 2018-2019 fiscal year, the Florida Board of Governors allocated $560 million in total PBF funds to 11 institutions (Florida Board of Governors, 2018). The decision to link educational performance and standardized measures has presented arguments from educators, students and lobbyists. Opponents argue that performance-based funding can lead to a reduction in public education access and diversity, that general performance-based education funding efforts are not indicative of higher educational performance, and that results-based financing will lead to the professionalization of education. (Kowal, nd). Nicholas Hillman, an assistant professor of education at the University of Wisconsin-Madison who has studied such state-based formulas, says performance-based funding is rarely effective. Stating that “performance-based funding schemes are more likely to work in non-complex situations where performance is easy to measure, tasks are simple and routine, objectives are straightforwardambiguity, employees have direct control over the production process and there are not multiple people involved in production. the result” (Inside Higher Ed, 2016). Findings from the Center on Budget and Policy Priorities found that in the aftermath of the 2008 recession, some states closed a budget gap of some $425 billion (Schoen, 2015). Many states felt these reductions in education subsidies as the Center reported that states reduced spending to $2,353 per student, a 28% decrease from 2008 (Schoen, 2015). Arizona and New Hampshire saw their student spending cut by 50%; eleven states reduced their spending by 33% (Schoen, 2015). These cuts have further exacerbated the mechanisms in place for universities to receive funding, placing greater emphasis on rigid performance measures. But as the economy continues to improve, increasing tax revenues, is performance-based funding hindering the education students receive? John W. Schoen, a business reporter for CNBC, said that on average, college students don't receive much difference in their education compared to college students. 15 years ago (Schoen, 2015). Some universities have actually increased spending on student amenities, such as gymnasiums, recreation centers, and dormitory upgrades, in order to attract students into the education market. Regardless of school spending, the reality remains that subsidies have been reduced on the public side, forcing students and families to pay more of the expense, and private schools widening the wealth gap even further. According to the College Board, over the past ten years, the average tuition rate increased by approximately 5%, 3.7% for private colleges, and 2.9% for public colleges between 2014 and 2015; a rate significantly higher than general inflation and household incomes (Saving for College, 2016). Recent state formulas for PBF have had little research into their effects and outcomes because their use is still relatively new (Dougherty JK, 2013). Their primary focus would be student outcomes. However, institutional impacts have been neglected (Dougherty JK, 2013). In a qualitative study by Iowa State University, Zoe Mercedes Thornton and Nahra Fridel provide a summary of the organizational impact of FBP on four small, rural community colleges. Their results indicated that performance-based policies affected college operations, improvement efforts, and school perceptions (Thornton and Friedel, 2016). In a 2013 study of 25 states spanning 20 years, PBF was found to have a small effect on degree attainment overall (Tandberg & Hillman, 2013). This study also found that it took five years from implementation for the disparity in graduation rates to become visible (Thornton and Friedel, 2016). Looking at states with community colleges, it was found that nine of 18 states saw little or no increase in graduation numbers, while only four of 18 appeared to have experienced statistically significant increases (Thornton and Friedel, 2016). Associate professor of higher education at Teachers College Columbia University, Kevin J. Dougherty and researcher Vikash Reddy reviewed 60 studies related to PBF measures and their impacts on educational institutions. They found that while the PBF had institutional effects such as funding changes, scrutiny of planning data andchanges in programs and services, there was no strong evidence to suggest that PBF significantly increased graduation rates, remedial course completion rates, or retention rates (Dougherty and Reddy, 2011). In a Texas news report, Claire Cardona writes about the downsides of PBF, emphasizing that a single formula cannot measure everything a college does (Cardona, 2013). His article highlights the fears of the President of the University of Texas, Ray Keck, who believes that a significant part of institutional efforts are not taken into account, or even ignored, in PBF measurement models (Cardona, 2013 ). Policy analyst Thomas L. Harnisch says that as institutions begin to shape their goals based on performance-based funding, there is a risk of harm in terms of access, equity, institutional and stability mission (Harnisch, 2011). A study by Ben Jongbloed and Hans Vossensteyn of the University of Twente in the Netherlands compared international government policies on PBF between Australia, Belgium (Flanders), Denmark, France, Germany, Japan, the Netherlands, New Zealand, Sweden, the United Kingdom and the United States. They described the mechanisms used for financing universities and the extent to which grants to universities are performance-oriented (Jongbloed and Vossensteyn, 2001). Their study found that most countries were oriented towards research rather than teaching, particularly due to research council funding (Jongbloed and Vossensteyn, 2001). When examining the United States, their study indicated that the primary reason for using performance indicators was as a measure of accountability. (Jongbloed and Vossensteyn, 2001). Although incentive funds are allocated in higher education budgets, these incentives have been found to be relatively weak (Jongbloed and Vossensteyn, 2001). When comparing education funding measured by performance, it was found that only three countries followed this practice; Australia, Germany and New Zealand (Jongbloed & Vossensteyn, 2001). Regarding education financing, the article indicates that governments are still reluctant to link resources to enrollment-based measures (Jongbloed and Vossensteyn, 2001). The reasoning could be attributed to the belief that performance should be understood in terms of increasing diversity and responsiveness to student needs (Jongbloed and Vossensteyn, 2001). The study also indicated that if university subsidies were tied to enrollment numbers, institutions would be more likely to follow their customer base and forgo academic excellence in favor of seeking customer incentives (Jongbloed & Vossensteyn, 2001 ). Jung Cheol Shin, published a study in which changes in institutional performance were measured following the adoption of new PBF-based accountability measures. Measures were based on representative graduation rates and federal research funding levels (Shin, 2010). Drawing on ten years of collected data, the study indicated that states that adopted performance-based accountability did not see a notable increase in institutional performance (Shin, 2010). The study further indicated that even if PBF initiatives did not result in better institutional performance, states may in fact fail to fully implement elements relating to reforms (Shin, 2010). It was also found that new initiatives may not include.