Impact of Workforce-Oriented Performance-based Funding on Students’ Return on Investment
Year: 2026
Type: article
Abstract: States are increasingly using workforce-oriented performance-based funding (PBF) to fund higher education and incentivize colleges and universities to improve students’ postgraduation outcomes. In this study we use detailed up-to-date data on workforce-oriented PBF policies in the United States combined with publicly available College Scorecard data to estimate the effect of PBF on students’ return on investment, as measured by debt-to-earnings ratios and loan default rates. We find that workforce-oriented PBF has minimal effects on students’ debt-to-earnings ratios and loan defaults except at historically Black colleges and universities, where we find suggestive evidence that workforce-oriented PBF reduced student debt.
Language: English
Subfield: Education
Field: Social Sciences
Domain: Social Sciences
Open Access status: hybrid
Estimated APC paid: $2,500
OpenAlex ID: W7225467361