Committee Hears ExcelinEd Pitch for Outcomes-Based Higher-Education Funding

Members of the Joint Interim Committees heard a presentation on outcomes-based funding for higher education from national policy group ExcelinEd, which urged Alabama to consider linking a meaningful portion of state funding to student completion and post‑graduation success while building safeguards for higher‑needs students.

"This is a practical, achievable policy that can make a real impact," Miranda Thomas of ExcelinEd said, introducing the organization’s work in more than 30 states. Policy expert Matthew Joseph told committee members that states that modernized outcomes funding — including Kentucky, Texas and Tennessee — saw measurable improvements and identified three design priorities: enough funding at stake, simple and focused targets, and adjustments to protect and reward institutions that serve higher‑needs students.

Joseph said those three components matter because tiny incentive pools can fail to change institutional behavior. "What you were offering was less than 1% of my budget, and it's very hard to make changes," he said, adding that in other states the outcomes‑linked share can be dozens of percentage points of state funding. Joseph described ExcelinEd’s assessment that Alabama currently links "less than 1%" of relevant budgets to outcomes and said a realistic phased approach might start with a 5–10% incentive pool, an amount he estimated illustratively in the "$30–$40 million" range depending on final design and scope.

Committee members pressed on evidence and implementation. One member asked whether Kentucky’s improved graduation trend could be attributed to the funding change alone; Joseph said the rate of change rose substantially in the period after Kentucky’s reforms and that attribution is imperfect but plausible when reforms were paired with other supports. Another member asked how Texas measures graduate wages five years after graduation; Joseph said Texas uses state employment records and unemployment insurance data, but Alabama could initially use shorter‑term proxies such as six‑month employment, exam passage or transfer rates and phase in more direct measures as data systems improve.

Lawmakers also raised equity and mission concerns. Joseph emphasized adjustments for higher‑needs students to avoid incentivizing exclusion, noting Tennessee and Texas use substantially higher weightings (presenter cited examples such as roughly "80% more" in Tennessee and "50% more" in Texas) for outcomes tied to adult learners or students with greater needs. Several members urged that design respect institutional missions and regional strengths — for example, not forcing every campus to focus on the same programs — and recommended aligning any incentive list of "higher‑value" programs with workforce and economic development priorities.

Chair statements and committee discussion made clear the group intends a deliberate process modeled on the earlier RAISE Act for K‑12: work with university presidents, convene stakeholders and phase in measures rather than enshrine detailed adjustments into statute. No bill was introduced or voted on at the meeting; chairs said staff will continue drafting and that a draft bill is a goal for a future meeting.

The committee adjourned after about an hour with plans for additional discussions with higher‑education leaders and staff before any formal legislative action.