Education

Higher Education that Delivers 

Education costs have soared for Americans in the past several decades. What are we getting for it? For many students, not much. But there are practical, proven solutions that state leaders can embrace to improve incentives in the system – and results for students.

Performance-based Funding (PBF)

In 2014, the State of Texas implemented a watershed policy change in its system of technical colleges. The State tied the funding of those colleges to the future earnings of its graduates. In other words, the colleges would get more or less taxpayer money in proportion to the earnings of its graduates.

In just five years, that policy change resulted in graduate earnings increasing more than 100%. That is a profound change, and proof that accountability and incentives can produce dramatically better results in institutions. The colleges taught more relevant material and focused on what matters – instead of ideology. The PBF funding formula has been a win for students, taxpayers, and state institutions.

But states can implement PBF at every institution to see real results: more focused and relevant coursework for students, better returns on taxpayer investment, and more money in the pockets of graduates.

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