How State Postsecondary Outcomes-Based Funding Could Help Students of Color and the Institutions that Serve Them
By Anna Cielinski
Former Senior Policy Analyst, Center for Law and Social Policy
Across the country, students of color complete postsecondary credentials at lower rates than their white peers. The reasons for this are many, including a history of structural and institutional racial discrimination that has perpetuated inequitable access to quality education and economic supports. State policy choices on how to fund postsecondary institutions—through the specific use of outcomes-based funding (OBF)—can either help or hinder efforts to address these inequities that affect so many students and our nation.
OBF equity measures—those that provide financial incentives for the success of underserved students—can include metrics that give institutions “extra credit” for best serving students of color. Race-specific equity measures are critical to ensuring that students of color are not turned away from schools because they may need different or additional supports and resources to complete credentials. If these metrics have sufficiently heavy weights in the OBF formula, institutions will take more seriously the incentive to serve students of color well and address completion gaps.
However, equity measures are not the only or even most important way that OBF policy can support students of color and the institutions that serve them. Upfront capacity building in institutions that disproportionately serve students of color—such as community colleges, Historically Black Colleges and Universities (HBCUs), and Minority-Serving Institutions (MSIs)—are critical to ensuring equal opportunity across institutions once an OBF formula goes into effect. Institutions that take seriously the need to close completion gaps provide support through cultural and community centers, student organizations, culturally responsive counseling, and other campus resources that address the needs of student of color. Well-designed OBF formulas can help fund these services that may be costly but are critical to institutions’ ability to support students of color in their college success.
State leaders creating or updating OBF formulas should use and heavily weight race and ethnicity in their equity measures. While low-income status is used in several state OBF formulas, it is not a sufficient proxy for race/ethnicity. States should also ensure that OBF policy is implemented equitably by providing up-front capacity funding to help institutions support students of color in their college success and upward mobility.
Research For Action’s OBF Equity Toolkit provides lessons on how states, systems, and institutions can address equity in the development and implementation of OBF policy. The Toolkit contains numerous short modules, grouped into four series, that focus on specific topics and provide lessons learned and recommendations for policymakers and institutional leaders to consider.
OBF formulas can be a powerful way of bolstering the educational success of students of color. It’s now up to states to focus their efforts on supporting this important group of students.