Research News

UW’s Hillman weighs in on governor’s ‘performance-based’ funding proposal

August 30, 2016

The Wisconsin State Journal recently published a report examining Gov. Scott Walker’s proposal to provide new funding for the University of Wisconsin System in the state's 2017-19 budget based on a series of “performance” measures such as graduation rates and job placement statistics.

On the one hand, the State Journal explains how this would “subject the System to a budget model that critics say has failed to deliver on its promise to improve higher education. But proponents of the idea, known as performance-based funding, disagree. They say a well-designed plan to tie UW’s dollars to student outcomes could lead to institutions serving those students, and the state, better.”

Among the range of experts the State Journal interviewed for this report is UW-Madison’s Nicholas Hillman.

As the article notes: “Within higher education circles ... the value of performance-based funding, or outcomes-based funding as some call it, is far from settled.”

“The idea of linking funding to performance is very politically appealing,” Hillman tells the State Journal. “But when you start to scratch the surface … we actually don’t see as much activity.”

The State Journal explains how “Hillman reviewed 12 studies comparing states that have instituted performance-based funding with those that use more conventional funding models. The studies showed little or no improvement in the graduation rates or number of degrees awarded in states with performance-based funding, Hillman said. His review also found that performance-based funding can lead to a range of unintended consequences. Colleges being judged on their graduation rates might become less likely to admit minorities or low-income students who officials think are less likely to graduate, which could make institutions less diverse, he said. The schools that benefit most under performance-based budget models also tend to be institutions that already have a lot of resources, while less well-off campuses that often serve low-income students and minorities don’t measure up as well and miss out on funding, according to Hillman.”

“There are real question marks about who gets those funds and whether it reproduces inequality,” Hillman tells the State Journal.

Hillman ​was also quoted in the Capital Times about performance funding, noting that ​the model "just doesn’t lend itself to the complexities of higher education."

Hillman is an associate professor who studies higher education finance and policy with the School of Education's Department of Educational Leadership and Policy Analysis. Hillman also is an affiliate of the Wisconsin Center for the Advancement of Postsecondary Education (WISCAPE)

To learn much more about this topic, check out the entire Wisconsin State Journal report and the Capital Times article.