Date of Award

Spring 2018

Document Type


Degree Name

Doctor of Philosophy (PhD)


Educational Foundations & Leadership

Committee Director

Mitchell Williams

Committee Member

Shna Pribesh

Committee Member

William Owings


As states legislatures seek improved results and increased accountability from higher education institutions, performance-based funding is frequently used as fiscal policy to determine state appropriations. Performance-based funding (PBF) determines an institution’s appropriation by its attainment of metrics, usually student outcomes. Early versions of PBF provided incentive funding for institutions that exceeded outcome goals, but later formulas included more intermediate metrics and required institutions meet targets to receive baseline funding. Prior studies examined the impact of PBF on retention and graduation rates at institutions through state-to-state comparisons and explored the political implications of PBF policies. Researchers found states using PBF did not improve student retention and graduation at greater rates than non-PBF states and recommended improvements to future PBF formulas (Dougherty, Natow, & Vega, 2012; Hillman, 2016; Shin, 2010).

Texas implemented the Returned Value Funding model, a PBF formula for Texas State Technical College (TSTC), in 2013 to improve the institution’s completion rates (Texas Higher Education Coordinating Board, 2013). The model incorporated recommendations from prior studies, including broad stakeholder collaboration, alignment with institutional mission, and a large percentage of the college’s budget determined by PBF. This study addressed a gap in the literature by evaluating the impact of the Returned Value Funding formula on TSTC’s graduation rate at the institution as a whole and by academic divisions.

The study used a matched sample design and an interrupted time series analysis to evaluate the impact of the Returned Value Funding model on graduation rates between 2005 and 2016. The tests provided both point-in-time and longitudinal views of the effects of PBF on graduation rates at TSTC. The results of both tests indicated PBF had no statistically significant impact on graduation rates at TSTC as a whole and mixed effects on rates at individual academic divisions.

The study recommends regular review of the outcomes of the Returned Value Funding model and additional disaggregation of the impact of the model by TSTC campus and by demographic populations. Research should also explore operational changes made by institutions in response to PBF, and findings from ongoing research should be incorporated into new or revised PBF formulas.