Higher Education Needs Smarter Spending for Student Success

President Obama says colleges can't keep raising tuition without producing results. Some schools are already organizing around student success.

In his recent State of the Union address, President Obama said colleges can't keep raising tuition without producing results. Performance-based funding is increasingly popular in higher education circles, especially formulas that tie payment to the number of students who complete degrees. But funding for higher education has long been tied to a different set of results: maximizing the number of paying students or building the most powerful alumni network in the legislature. That approach served some institutions well in the short term, but wasn't always in the best interest of students.

Performance-based funding is beginning to help organize entire campuses around the goal of student success, but many state leaders still pay less attention to the responsibility of students and to their own roles in aligning state aid programs with graduation goals. These leaders should promote the same kinds of incentives for students that performance-based funding does for institutions.

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