Indiana’s public colleges will receive extra state funding based on on-time degree completion, credential counts, and graduate retention, after the commission approved a simplified outcomes-based formula.
The Indiana Commission for Higher Education approved a new outcomes-based funding formula in July 2026.The formula ties additional state dollars to on-time degree completion, credential attainment and graduate retention in Indiana’s workforce.
The Indiana Commission for Higher Education announced on July 23, 2026, that it will reinstate performance-based funding for the state’s public colleges and universities [1]. The decision follows a unanimous vote to adopt a simplified outcomes-based formula that will be incorporated into the next biennial state budget [1]. The policy applies to all public higher-education institutions overseen by the commission, including Indiana University, Purdue University system campuses, and the state’s community colleges [1].
Commission members, university leaders, state legislators, and representatives from business and industry participated in the development of the new formula [2]. The commission collected stakeholder feedback during a series of public hearings and written submissions, then crafted a metric set that emphasizes degree completion rates, the number of credentials awarded, and the proportion of graduates who remain employed in Indiana [2]. The revised approach replaces the earlier, more complex model that required reporting on a broader array of performance indicators [4].
New Performance Funding Formula Approved
The commission’s July 23 meeting resulted in unanimous approval of the revised formula, which will allocate supplemental state funds to institutions that meet defined outcome thresholds [1]. Funding is calculated based on three primary metrics: (1) the percentage of first-time, full-time students who earn a degree or credential within the expected time frame, (2) the total number of credentials awarded across associate, bachelor, and professional programs, and (3) the share of graduates who secure employment in Indiana or continue in state-based graduate education [2].
Institutions that exceed baseline targets will receive additional appropriations proportional to their performance, while those that fall short will not be penalized with reduced baseline funding [1]. The formula is designed to be transparent, with quarterly reporting requirements submitted to the commission and made publicly available on the commission’s website [1]. The commission estimates that the revived program could direct up to $45 million in extra funding over the next two-year budget cycle, contingent on institutions meeting the established benchmarks [2].
Commission members, university leaders, state legislators, and representatives from business and industry participated in the development of the new formula [2].
Stakeholder Input and Metric Simplification
Indiana Commission Revives Performance-Based Funding for Public Colleges
The commission’s redesign process began in early 2025, when it solicited input from a coalition of legislators, business leaders, higher-education administrators, and student advocacy groups [2]. Feedback highlighted concerns that the prior model’s twenty-plus metrics created administrative burdens and diluted focus on core student outcomes [4]. In response, the commission reduced the metric set to three core indicators, aiming to streamline data collection and align funding more closely with workforce needs [2].
Two former “60 Minutes” correspondents allege that CBS executives directed them to insert partisan language and omit factual context, raising concerns about editorial independence.
Business and industry representatives emphasized the importance of aligning graduate skill sets with regional labor market demands, prompting the inclusion of a workforce-outcome component that tracks graduate employment within Indiana [2]. Higher-education leaders, including the presidents of Indiana University Bloomington and Purdue University West Lafayette, expressed support for a model that rewards institutions for measurable improvements in completion and retention [3]. Lawmakers from the Indiana General Assembly also voiced backing, noting that performance-based funding can enhance accountability for public dollars while encouraging institutions to adopt evidence-based student success strategies [2].
Immediate Impact on Indiana Higher Education
Effective with the upcoming biennial budget, the revived performance-based funding model will provide immediate financial incentives for institutions that can demonstrate progress on the three key metrics [1]. Colleges and universities are expected to adjust enrollment counseling, academic advising, and curriculum pathways to improve on-time completion rates [3]. Community colleges, which serve a large proportion of first-generation students, may prioritize accelerated degree programs and stackable credentials to meet the new criteria [1].
Students could experience enhanced support services, such as expanded tutoring, early-alert systems, and career-placement resources, as institutions allocate additional funds toward initiatives that directly influence the measured outcomes [2]. For employers, the policy signals a stronger pipeline of locally trained graduates, potentially reducing hiring gaps in sectors such as advanced manufacturing, health care, and information technology [2]. State policymakers anticipate that the model will generate more granular data on student success, informing future legislative decisions on higher-education financing [1].
Key Facts
What: Indiana reinstates performance-based funding for public colleges, linking extra state dollars to degree completion, credential awards, and graduate retention.
State policymakers anticipate that the model will generate more granular data on student success, informing future legislative decisions on higher-education financing [1].
When: Approved July 23, 2026; to be implemented in the next biennial budget.
Impact: Institutions receiving additional funds must meet outcome targets, prompting changes to student support and curriculum that affect Indiana students, educators, and employers now.
A recent ruling by a Delhi consumer commission reinforces the rights of health insurance policyholders, stating that insurers cannot reject claims without evidence. This decision…
NewsNews
