In 2023, U.S. states invested over $120 billion in higher education. To understand how states are measuring the return on these investments, what they are doing with this information, and which best practices can be shared to enhance and scale success, American Student Assistance® (ASA) and the Education Strategy Group (ESG) recently published Measurement for Mobility. The report describes state practices for measuring, supporting, and improving the long-term success of K-12 and higher education students.
In this second of a three-part blog series on the report, we’ll do a deep dive into the findings for higher education.
Higher Education Postsecondary Student Success Metrics
Historically, public colleges and universities received most of their state funding based on student enrollment. But more and more states are transitioning to Postsecondary Outcomes to better influence institutions’ focus and behavior. The report identifies two major sub-types of Postsecondary Outcomes:
- College Success Outcomes – These indicators measure students’ progress and attainment in postsecondary education. Examples include gateway course completion, credit accumulation, persistence rates, transfer rates to four-year colleges, degrees and credentials awarded, and graduation rates. Some states also track related measures such as time to degree and student debt.
- Workforce Outcomes – These measures track how students do after they leave the postsecondary education system. They include employment and job placement rates, fields of employment, earnings, and ROI.
How States are Using Metrics
Public Reporting
While states are required by federal law (i.e., the Every Student Succeeds Act, or ESSA) to monitor and intervene based on specific metrics for K-12 institutions, they are currently under no such obligation for public colleges and universities. However, changes in higher education accountability are on the horizon with the recently issued “Gainful Employment” rule and related Financial Value Transparency framework.
Although federal laws don’t yet require higher education accountability systems, the report found that the majority of states track and use data for public reporting and in funding incentives. (See Table 1).
TABLE 1: How States Use Postsecondary and Workforce Success Data
| Use | College Success Outcomes | Workforce Outcomes |
| Public Reporting (available to the public and have no formal stakes) | 46 states + D.C. | 35 states |
| Funding Incentives (Systems that award state funding if target outcomes are met) | 29 states | 6 states |
Almost all states share College Success Outcomes in public reporting and about two-thirds report Workforce Outcomes. But states are still struggling with how to calculate the value or ROI of a college degree. Tracking data on students who attend out-of-state colleges or move out of state, enlist in the military, decline to report personal data, or choose career pathways that don’t report for unemployment insurance purposes such as federal government jobs or self-employment, is a large part of the problem.
A handful of states are leading the way with promising practices:
- Kentucky – The Higher Education Return on Investment report shows the average ROI over the lifetime of the student and state, including how much the state invests in the average student via financial aid and the spending and tax revenue generated by a college graduate. And its Students’ Right to Know dashboard allows students to select a major, see job projections and associated salary information, and determine which institutions offer that major. It also includes details on financial aid, graduation rates, default rates, and salary rates for graduates of that institution to allow students to make informed decisions about their futures.
- Indiana – The College Value Reports include
sinformation on the average cost of attendance after financial aid, median salary after graduation, average debt, student satisfaction and graduate retention in the state for each institution. - Colorado – The Higher Education Return on Investment Report informs parents, students and policymakers about four key areas -cost, debt, choice, and value. It includes information on tuition, time and credits to credentials, loan debt, and median earnings as well as an earnings outcome dashboard that displays earnings by institution, program, degree, gender, and ethnicity.
Funding Incentives
Performance-based funding (PBF) in higher education has been around for over 40 years. Early programs were limited in part because they relied more on inputs than outputs and rewarded schools for high completion metrics, deprioritizing admissions for underserved populations. Around 2008 the approach to funding incentives evolved to focus more on outcomes-based funding (OBF) formulas that generate a higher proportion of state aid.
Of the 29 states that use some form of OBF, 22 use it for both two-and four-year college systems. Note that the metrics used and the funding formulas often vary for different types of institutions.
All of the states with OBF incorporate College Success Outcomes in their frameworks, but only six incorporate Workforce Outcomes including:
- Florida – It is the only state to include Workforce Outcomes in its OBF model for four-year colleges and universities.
- California – The OBF program for community colleges goes into full effect in 2024 and allocates approximately 10 percent of total funding based on “student success,” which includes a measure of how many graduates are earning a regional living wage within one year of leaving community college.
- Texas – Its OBF model awards funding based on successful transfers to four-year colleges, the attainment of “credentials of value” based on labor market data, and notably the number of high school students who complete at least 15 credit hours in dual credit or dual enrollment courses.
- Montana – This framework is tied to the state’s goal to increase the population with higher education credentials to 60 percent, tracks undergraduate degrees/certificates awarded and retention rates for its flagship universities, four-year regional universities, and two-year colleges, as well as incorporates unique metrics for each type of institution.
Key Higher Education Takeaways
The vast majority of states are reporting College Success Outcomes for their public colleges and universities, and more than two-thirds are sharing their Workforce Outcomes. Yet when it comes to funding incentives, even though more than half of states use this approach, their metrics and weights vary widely with only a handful of states incorporating Workforce Outcomes into their systems.
To learn how K-12 is using metrics for postsecondary and workforce success, read part one of this blog series. And for recommendations for state leaders and policymakers designing next-generation measurement and accountability systems for K-12 and higher education, stay tuned for part three.
