Improving student outcomes through next generation public finance design

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Project Description

What next-generation finance model can solve the student affordability crisis?


Over a period of 18 months, Kinetic Seeds and partner HCM Strategists, with funding support from the Lumina Foundation, engaged in an experimental initiative designed to bring a group of traditionally siloed state policymakers, system players, institutional leaders, researchers and practitioners together to explore how well-designed public higher education finance models might be constructed to help public colleges and universities focus on student completion. This multidisciplinary cohort was asked to harness evidence-based funding trends and determine how the momentum behind these trends should influence thinking about next-generation funding models.

The resulting effort would then lead to a set of guiding design principles that consider the role of funding design in:

  1. Support of increased attainment and educational outcomes among students from all backgrounds, closing gaps for those currently underrepresented among postsecondary completers such as racial and ethnic minorities, 1st generation college-going students, students from low-income families and adults with some college credit or no college attendance; and
  2. Advancement of high quality, student-centered, delivery innovation and the systemwide capability necessary to realize it.


What if states’ attainment goals were the focal point of public higher education funding? What if closing equity gaps and developing necessary learning innovations to get us there were a priority? What principles would guide these priorities?

Principle 01
Public money should be targeted where it’s most needed– ensuring more racial and ethnic minorities, students from low-income families, and first-generation students earn degrees, certificates and other credentials to close existing attainment gaps.

Principle 02
Public money should be allocated to colleges, universities, and other postsecondary providers in ways that signal the need for steady increases in the overall share of residents who have credentials, with particular attention to ensuring societal, workforce, and individual needs are met

Principle 03
Financial incentives should be sufficient to motivate colleges, universities, and other providers to offer flexible, easy-to-navigate academic programs, clear transfer points that enable steady progress toward completion of credentials, and sufficient supports to keep at-risk students on track.

Principle 04
Thoughtfully designed outcomes-based funding should be sustained as the state’s core source of operating support for postsecondary education, regardless of economic conditions, to achieve fairer educational results across racial and ethnic groups necessary to improving postsecondary attainment.

Principle 05
Outcomes-based funding should be accompanied by state financial aid and tuition policies that reinforce the need to accelerate student completion of credentials.


  • Download this Kinetic Seeds produced infographic FUNDING FOR BETTER OUTCOMES detailing the skinny on next-gen finance. For more information design principles for next-generation funding, email us at

Project Details

  • Date13 November 2015
  • CategoryDesign-Thinking