Publication Date



Open access

Embargo Period


Degree Type


Degree Name

Doctor of Education (EDD)


Educational and Psychological Studies (Education)

Date of Defense


First Committee Member

Soyeon Ahn

Second Committee Member

Carol-Anne Phekoo

Third Committee Member

Debbiesiu L. Lee

Fourth Committee Member

Stephen Johnson


Higher education funding formulas have been implemented by state legislation since the 1800s to align state and institutional goals. Outcomes-based funding, or “performance-based funding 2.0,” emphasizes student performance measures such as retention and graduation rates, and is rapidly becoming the nation’s most popular funding policy as the calls for accountability increase. In this shift to outcomes-based funding, Hispanic students may be marginalized because of their tendency to have less college preparation, to enroll in two-year colleges, and to attend classes part-time. This study explored the effects of outcomes-based funding on Hispanic students from 2011 to 2015 across 50 states, with a focus on state retention and graduation rates for Hispanics enrolled in two-year colleges, by comparing states with such funding against states without it. In addition, the differential effects of outcomes-based funding on retention and graduation rates by state contextual factors (e.g., political party in power and level of funding) and institutional factors (e.g., gender ratio of Hispanic students) were examined. In general, findings were mixed. No difference in the graduation and retention rates of Hispanic students in two-year colleges was found between states with outcomes-based funding and those without outcomes-based funding. Additional analyses found that the retention rates of part-time Hispanic students in two-year colleges were significantly lower in states without outcomes-based funding when compared to states that planned to implement such funding. In addition, significant differences were found in graduation rates between states that planned to implement outcomes-based funding and those without such funding. These differences depended on the state’s political party in control, which suggests the particular susceptibility of outcomes-based funding approaches to partisan aims. Implications for government policymakers and higher education institutions are discussed.


Outcomes-based funding; Hispanic students; two-year colleges; community colleges; governance; accountability; political control