Accounting for Success

The governor’s office and the university make the case for a performance-based funding model for higher ed.

blue background with illustration of Old Main in white by Nick Sloff '92 A&A


Penn State President Neeli Bendapudi made the case last fall for a performance-based funding model that would address financial
challenges faced by the state’s public universities. As she outlined in an op-ed for PennLive, such models are designed to prioritize accountability “for how taxpayer dollars are spent and for showing a return on investment.” A successful model would “grow the funding pie rather than just reallocate existing resources … [and] reward institutions with additional dollars for achieving agreed-upon metrics.”

Bendapudi’s pitch has buy-in at the state level. In January, Gov. Josh Shapiro released a “new blueprint for higher education” that emphasizes competitiveness, workforce development, and access and affordability. The blueprint includes a proposal for the state to adopt a performance-based plan for higher education funding, using “a predictable, transparent, outcomes-focused formula that will incentivize colleges and universities to focus on what’s most important to the Commonwealth.”

Per Shapiro’s proposal, such a formula would emphasize increasing enrollment, the number of first-generation students who complete degrees, and graduation rates, as well as incentivizing institutions to “recruit and support students to complete degrees and earn credentials in fields facing workforce shortages, such as education and nursing, and growing fields like advanced manufacturing and biotechnology, that will drive our Commonwealth’s economic growth in the decades to come.”

If implemented, the model would align with Bendapudi’s ongoing efforts to boost Penn State’s appropriation in a way that emphasizes accountability. “An effective and fair model should be flexible, and it must consider the unique mission and structure of each university,” she wrote last fall. “The model also must be simple, with clarity and transparency around what it is trying to accomplish, and the metrics must be aligned with the state’s needs and priorities. Above all, this must be a collaborative effort between lawmakers and the universities.”