Penn State urges equity and multiple metrics as Pennsylvania builds performance-based funding

Dr. Sarah Thorndike, senior vice president for finance and business and treasurer for Pennsylvania State University, told the Performance Based Funding Council that Penn State supports performance-based funding when the model increases overall dollars, uses multiple metrics across inputs, throughput and outputs, and accounts for equity across institutions.

"For too long, higher education funding in Pennsylvania has lacked clarity, fairness, and predictability," Dr. Thorndike said. She thanked the council and staff for passing Act 90 of 2024 and identified the university's preferred metric framework as "input, throughput and output" with potential weights for enrollment, retention/progression metrics and workforce-relevant degree completions.

Why it matters: Penn State is one of the three state-related universities affected by the council's work; its testimony focused on aligning per-student funding more equitably across institutions and including premium weights for students with higher needs.

Key points from Penn State testimony

Input: Dr. Thorndike said enrollment should be a key indicator, with possible extra weights for students with certain characteristics "such as Pell grant recipients, first-generation college students, or in-state versus out-of-state enrollment."

Throughput: She urged multiple progression benchmarks rather than a single four- or six-year graduation metric so institutions are not penalized when students change majors or experience life disruptions. "Retaining those students and helping them through whatever life throws at them, is critically important to us too," she said.

Output: Workforce indicators and degree completions in high-demand fields should be part of the formula, Thorndike said, and any new money should be distributed so that Penn State's per-student funding is more closely aligned with other institutions without harming peers.

Act 90 and next steps

Thorndike referenced the recently passed Act 90 of 2024 and told the council Penn State will participate in implementation and panel testimony. "We remain an eager partner and are committed to accountability, transparency, and to demonstrating outcomes," she said.

Council members asked for clarifications: Chair Jared Topper asked whether Thorndike meant predictability from state appropriations; she confirmed state funding timing was the primary concern for university budgeting. Representative Pete Schwier and others pressed on throughput metrics and equity protections; Thorndike emphasized multiple benchmarks and safeguards against penalizing institutions that serve students who take longer to complete degrees.

Takeaway

Penn State's message to the council: adopt a multi-metric model that (1) grows the overall funding pool, (2) uses input-throughput-output measures with focus-population weights, and (3) protects institutional mission and equity in per-student funding.