State Performance Funding
FY 2024-25 is the eighth year the Kentucky General Assembly has used performance funding models to allocate state appropriations to the public universities and the Kentucky Community and Technical College System (KCTCS). The models support Kentucky’s college attainment goal which is to raise the percentage of working-age adults (ages 25 to 64) with a high-quality postsecondary degree or certificate to 60 percent by the year 2030. There is a performance model for the eight public universities and a separate model for the KCTCS institutions. The performance funding model for the public universities is based on 11 metrics primarily focused on student success such as bachelor’s degrees produced, earned student credit hours, and undergraduate student progression. The competitive-based model rewards universities with rates of growth that exceed the sector average.
Pursuant to KRS 164.092, 11(b)(c), the Council on Postsecondary Education (CPE) shall convene a postsecondary education working group every three fiscal years to:
- determine if the comprehensive funding models are functioning as expected
- identify any unintended consequences of the models
- recommend any adjustments to the model
The working group is to include the following persons or their designees: CPE president, president of each public postsecondary institution, the Governor, the Speaker of the House, and the President of the Senate. Pursuant to the statute, CPE convened the working group in 2023. The working group subsequently voted unanimously to recommend five changes to the University funding model:
- increase the premium provided for bachelor’s degrees awarded to low-income students (increase pool allocation from 3 percent to 8 percent)
- add a new adult learner metric to the model
- eliminate the degree efficiency weighting of the bachelor’s degree metric
- increase the small school adjustments for Kentucky State University and Morehead State University, and
- increase the nonresident credit hour weighting from 50 percent to 75 percent
The 2024 Kentucky General Assembly enacted the recommended changes plus one additional change -- to replace the bachelor’s degrees awarded to underrepresented minorities (URM) metric with a new metric which measures bachelor’s degrees awarded to first generation students. Regarding the model weights, the General Assembly allocated 1.5 percent of the 3.0 percent weight previously allocated to the bachelor’s degrees awarded to URM students metric to the bachelor’s degrees awarded to the low-income students metric and allocated the remaining 1.5 percent to the new metric measuring bachelor’s degrees awarded to first generation students.
UK has achieved the highest number of growth rates above the sector average for every year the model has been in use. In fact, UK is responsible for the majority, and in some instances all, of the growth in the number of bachelor’s degrees awarded by the system. For example, the total number of bachelor’s degrees awarded by all the public universities to low-income students decreased a net 8.2 percent from Academic Year (AY) 2013-14 to AY 2022-23. However, UK increased its number of bachelor’s degrees awarded to low-income students by 12.0 percent during the same period.
