Year of Publication



Martin School of Public Policy and Administration

Date Available


Degree Name

Master of Public Administration

Committee Chair

Dr. Rajeev Darolia

Executive Summary

Performance-based funding (PBF) policies in the United States have grown both in complexity and popularity over the last two decades. While states seek to utilize these models to enforce accountability at institutions of postsecondary education, the rise of such funding policies has not come without scrutiny. Researchers have found evidence of adverse consequences resulting from these policies, many of which disproportionately impact underrepresented groups of students, smaller schools, and minority-serving institutions (MSIs) such as Historically Black Colleges and Universities (HBCUs). While opponents of the policies have, in some cases, called for the abandonment of PBF models altogether, proponents have sought alterations to the models to mitigate these consequences. Amongst corrective solutions, the inclusion of PBF equity premiums has been the most consistent form of revision. These premiums function by providing financial incentives through their allocation models that are intended to mitigate harm done to targeted stakeholders. This study seeks to answer a central research question: Do PBF premiums have any effect on public 4-year HBCUs, as measured by graduation rates, retention rates, and state apportionment? To answer this, the study employs a quasi-experimental difference-in-differences model with panel data ranging from 2007-2019, as well as year and institution fixed effects. Findings indicate that minority premiums, on average, are correlated with lower state apportionment, while adult student premiums, on average, a re correlated with slight increases in apportionment. This study concludes that PBF premiums may be insufficient for bolstering student success and improving institutional resources at public HBCUs compared to their non-premium counterparts. Thus, states wishing to correct for the adverse consequences of PBF models should consider alternative or additional venues



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