The Pennsylvania General Assembly this summer passed a bill introducing performance-based funding for state-related universities. The universities in the bill, Temple, Penn State and Pitt, will be reviewed by a council who will request multiple sets of data in order to qualify, The Philadelphia Inquirer reported.
The Performance-based Funding Act, formerly Senate Bill 1154, will require state-related universities to submit performance data in order to qualify for future state funding. The data will include multiple metrics about the universities, including its affordability, retention and graduation rates, profiles of students and post-graduate employment rates and salaries.
Universities will still receive the flat funding they have always received, with chances to gain additional funding based on their performance.
“All three universities will be represented, and you need a two-thirds vote, which means four or five votes on the Council to approve anything,” said Pennsylvania State Rep. Jesse Topper. “The makeup of the council limits any kind of concern that [a university] would get left out in the cold in terms of how the metrics are designed.”
Temple leadership has been open to the idea of performance-based funding as a whole. The plan originally was proposed by Pennsylvania Gov. Josh Shapiro, highlighting his plans for a higher education “overhaul” that he announced in February. Temple, along with Penn State, participated in a group sponsored by the governor when the idea was initially developing.
Submitting data to the council for transparency is not a new request for Temple, who has already provided this information for years, said Temple’s Chief Operating Officer Ken Kaiser.
Kaiser supports the bill, but also said its success will largely depend on whether or not Temple will be asked to provide data that is measurable.
“One of the principles of performance-based funding is it should be simple, easy to understand, and not have too many metrics in there,” Kaiser said. “The key here is we can only give them data that we have. So the metrics can only be based on data that schools collect.”
The submission of data that displays the affordability of the university is currently unknown. It is also unclear if the required tuition data will contain student loans and any federal aid.
“I would argue [affordability data] shouldn’t be based on student debt because the profile of students at Temple are way different than they are at Pitt and Penn State,” Kaiser said. “If your students come in being able to afford less, they may have more debt. You have to really be careful about the metrics you’re selecting. You don’t want unintended consequences.”
Performance-based funding has become an increasingly popular plan in higher education — 32 states use this kind of funding for at least one sector. States determine how much money an institution gets based on a set of measures. The funding strategy aims to incentivize these institutions into doing better for their students, attract more students with grant money and improve transparency about the university’s internal functions.
Transparency is marked as a concern by those who support the bill, including Republican lawmakers who cited issues in research, gender-affirming care and campus protests over the war in Gaza.
Temple has received flat funding without increase from the state for the sixth year in a row. The hope with the new bill is to secure an increase in funding for the university regardless of the past six years. The bill received bipartisan support, alongside government and university officials.
“The primary goal is to see if we can establish something that would allow these universities to increases that would be performance based,” Topper said. “As opposed to just what we’ve done in the past, which is kind of throwing a dart at a dartboard and saying, ‘Oh, this year you should get a 5% increase. Or this year a 2% increase, or this year flat funded.’”
Student leaders on campus, like Temple Student Government President Ray Epstein, think major issues could arise from a performanced-based funding model.
“While programs like these do have the potential to be successful and benefit universities, there are some issues I can visualize arising,” Epstein said. “There is potential for marginalized groups to be negatively affected, or for admissions criteria to change.”
Many states include incentives for institutions who have more outcomes of minority groups completing their programs. However, many institutions with higher percentages of Pell Grant recipients see less state support than those with fewer-lower income students.
“It’s early and difficult to predict how this will impact the different universities in Pennsylvania that it names,” Epstein said.
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