HARRISBURG, PA — A groundbreaking approach to university funding in Pennsylvania is on the horizon as the state’s Performance-Based Funding Council unanimously adopted a report laying out a framework to tie future public funding to measurable outcomes. Announced on Monday, May 5, by House Republican Leader Jesse Topper, R-Bedford/Fulton, the recommendations aim to drive accountability and sustainability in funding for Pennsylvania State University, the University of Pittsburgh, and Temple University.
The council was formed under Act 90 of 2024 and began work in January 2025, convening hearings in Harrisburg and at the three institutions at the heart of the funding reforms. “I want to thank the members of the Performance-Based Funding Council, as well as those who provided input into the process of developing this report and associated recommendations,” Topper said. “This report and recommendations provide a path toward additional accountability for three of the largest schools receiving state support while ensuring a sustainable way of measuring performance and related funding going into the future.”
Key Recommendations for Funding Reform
The report outlines a multi-faceted plan that proposes linking new funding to outcomes while preserving baseline allocations. Among the key recommendations are the following measures:
- Establishing Permanent Oversight: The council recommends making itself a permanent body to oversee the performance-based funding model as it evolves.
- Implementation Timeline: The model would be applied to new funding beginning in fiscal year 2026-27 while maintaining existing funds as baseline allocations. Universities would also receive transitional “institutional advancement funding” in fiscal year 2025-26.
- Weighted Student Metrics: Performance allocations will consider weighted student counts at each institution. Factors would include undergraduate enrollment, credit progression beyond 60 credits, the number of Pell-eligible students, students from underrepresented high schools, transfers from community colleges, and degrees awarded in high-demand fields.
- Performance-Based Evaluations: Institutions will be evaluated on specific metrics, including four-year and six-year graduation rates, six-year Pell-eligible graduation rates, degrees awarded in high-priority occupations, affordability initiatives, and year-over-year improvements.
The council’s recommendations represent a shift toward a data-driven funding model aimed at rewarding institutional achievements while addressing affordability and inclusivity.
The Path to Implementation
With these recommendations now finalized, the council will focus on drafting legislation to present to the General Assembly. The aim is to institutionalize these measures and ensure they are implemented effectively. The proposed funding model signals an effort to address growing concerns about fiscal responsibility in higher education, student success rates, and access for underprivileged populations.
Leaders in Harrisburg believe that incentivizing progress through performance metrics can create a more equitable and goal-oriented distribution of state funds. The focus on Pell-eligible and low-matriculating students also highlights the state’s awareness of education disparities and the importance of bridging these gaps.
Broader Implications for Higher Education
If enacted, Pennsylvania would join a growing number of states adopting performance-based funding models for public universities. Advocates see the model as a step forward in holding institutions accountable while promoting student-centric policies. These measures aim to help universities produce job-ready graduates, aligning with Pennsylvania’s workforce demands.
Implementing this framework also underscores the state’s commitment to greater transparency in how taxpayer funds are utilized. Prioritizing outcomes and graduation rates could drive institutions to reassess their internal policies, focusing on retention, student success, and equitable access.
Looking Forward
The unanimous adoption of the funding council’s recommendations sets the stage for a significant transformation in how Pennsylvania funds its flagship universities. With the report paving the way for legislative action, the proposed performance-based funding model demonstrates a commitment to innovation and accountability in higher education.
Topper emphasized that the next step is critical, as legislators begin shaping the model into actionable policy. If successful, the initiative not only has the potential to improve outcomes for students across Pennsylvania but may also serve as a national model for reforming state education funding.
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