Typology Overview

The classification system outlined below assigns states’ FY 2016 OBF policies—those being implemented and those that are developed or under development—a “type” according to their level of sophistication and adherence to promising practices. That is, in the following critical areas, the state has:

  • Established completion or attainment goals and related priorities;
  • Stable and formula-driven funding structure (base funding);
  • Significant level of funding;
  • Inclusion of all public institutions in both two-year and four-year sectors;
  • Differentiation of metrics and their associated weights by sector;
  • Prioritization of underrepresented students; and
  • Sustained funding over consecutive years.

These typology characteristics reflect commonly articulated and research-informed design and implementation principles and together enable a broad analysis of state OBF policies. The italicized portions are new to the typology assessment, and they reflect the importance of predictable and understandable funding systems in institutional planning and efforts to improve student success. Institutional investments associated with increased student success, such as predictive analytics, intrusive intervention systems, advisors, guided pathways and other practices, are long-term in nature and require a predictable and rationalized funding environment.

The typology examines state-level higher education finance policy and its alignment to The typology of state OBF policies outlines the escalating level of significance and sophistication of funding policies, ranging from Type I to Type IV systems. Type I systems are rudimentary in nature and may be pilot efforts that do not have significant levels of funding, are likely to share features with earlier performance-funding models and minimally link the state’s finance policy with completion and attainment goals. Type II and III systems represent increasing degrees of development and adherence to promising practices. Type IV systems are the most robust and reflect strong alignment between the state’s completion and attainment agenda and finance policy. These systems include significant and stable funding, full institutional participation, differentiation by metrics and institutional sector, prioritization of both degree/credential completion and outcomes for underrepresented students.

In a few cases, a state has some form of an OBF policy in place but has not established a statewide completion/attainment goal or related priorities. This reflects a misalignment of its own—a finance policy not anchored to an overall goal or agenda. As noted in the Design and Implementation Principles section of the 2015 Driving Better Outcomes report, articulating goals and priorities is an important part of any higher education policy development—finance or otherwise. For a listing of states’ FY 2016 policies by type, see the Interactive Map.

TYPICAL CHARACTERISTICS

Note: Some states may meet most but not all criteria. States that do not meet all criteria for a particular type are assigned a lower type. Italicized elements are primary differences from prior level.

Type I

  • State may have completion/attainment goals and related priorities
  • Model reliant on new funding
  • Low level of funding (under 5%), based on statewide analysis
  • Some or all institutions in one sector included
  • No differentiation in metrics and weights by sector
  • Degree/credential completion not included
  • Outcomes for underrepresented students not prioritized
  • Target/recapture approach
  • May not yet have been sustained for two or more consecutive fiscal years

Type II

  • State may have completion/attainment goals and related priorities
  • Recurring dollars/base funding at least portion of funding source
  • Low level of funding (under 5%), based on statewide analysis
  • All institutions in one sector included, or some institutions in both sectors
  • No differentiation in metrics and weights by sector, or may not be applicable (if operating in only one sector)
  • Degree/credential completion included
  • Outcomes for underrepresented students may be prioritized
  • Target/recapture approach likely
  • May not yet have been sustained for two or more consecutive fiscal years

Type III

  • State has completion/attainment goals and related priorities
  • Recurring dollars/base funding at least portion of funding source
  • Moderate level of funding (5-24.9%), based on statewide analysis
  • All institutions in all sectors included
  • Differentiation in weights and metrics by sector likely
  • Outcomes for underrepresented students prioritized
  • May not be formula-driven
  • Not sustained for two or more consecutive fiscal years

Type IV

  • State has completion/attainment goals and related priorities
  • Recurring dollars/base funding
  • High level of funding (above 25%) based on statewide analysis
  • All institutions in all sectors included
  • Differentiation in metrics and weights by sector
  • Degree/credential completion included
  • Outcomes for underrepresented students prioritized
  • Formula-driven
  • Sustained for two or more consecutive fiscal years