Public finance literature undergirds the idea that incentives and alignment to objectives matter. However, how to best translate the concept into effective finance policies and models for higher education remains unresolved. HCM’s report, Driving Better Outcomes: Typology and Principles to Inform Outcomes-Based Funding Models, and the analysis within are a first effort to distinguish between various state OBF policies based on key elements they address and the level of funding they command. The Driving Better Outcomes: Fiscal Year 2016 State Status & Typology Update report provides an enhanced typology recognizing the importance of predictable and understandable funding systems in institutional planning and efforts to improve student success and current information on state funding policies.
The state OBF policy typology described is not a ranking or rating system. Rather, it is a way of objectively gauging the continuing evolution of state OBF policies and assessing the degree to which they incorporate best practices identified by research and the experience of leading states. The aim of this classification effort is to help inform policymakers, stakeholders and researchers by furthering the development, improvement and analysis of postsecondary funding policies that incent and yield the best outcomes for students.
The report also provides historical context for OBF, and design and implementation principles to support development of strong, effective policies. The interactive map of state information in this report will be updated periodically as developments in state policies warrant.
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