Performance-Based Funding for Community Colleges: Are Colleges Disadvantaged by Serving the Most Disadvantaged Students?

Texas recently adopted a new performance-based funding (PBF) model for community colleges. Using institutional student unit record data, this study applied the metrics from this PBF model to examine enrollment outcomes among 5,900 students attending a large, racially/ethnically diverse community college system in the state. Our findings revealed stark differences in PBF apportioned to the college as a function of students' characteristics. On average, students who were Asian, age 19 or younger, pursuing academic/transfer degrees, enrolled full-time, Pell Grant recipients, and assigned to the highest-levels (i.e. closest to college-level) of developmental math procured the most PBF for the college. Conversely, African American, older adults, part-time students, GED holders, and students assigned to the lowest level of developmental math secured much less funding. To assuage undesirable consequences on institutional behavior, we recommend modifications to Texas' PBF model that could help ensure community colleges are not discouraged from serving less advantaged students.