Performance Funding

Kentucky’s performance funding model aligns state funding for public postsecondary institutions with student success, course completion, operational support and the Commonwealth’s higher education and workforce goals. The General Assembly has declared that Kentucky’s postsecondary funding model should align state investment with postsecondary education policy goals and objectives. Every four years, the Postsecondary Education Working Group on Performance Funding is convened to review the model and consider updates to its goals and objectives.  KRS 164.092(3)(a).

The statute establishes a comprehensive funding model for the public postsecondary education system to be implemented by the Council on Postsecondary Education. The model includes separate formulas for the public university sector and the Kentucky Community and Technical College System sector. KRS 164.092(4).

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Guiding Legislation

• KRS 164.092 — Comprehensive funding model for the public postsecondary education system
• 13 KAR 2:120 — Comprehensive funding model for public universities
• 13 KAR 2:130 — Comprehensive funding model for the Kentucky Community and Technical College System

Guiding Documentation

• Postsecondary Education Working Group records archive
• Final Report of the Postsecondary Education Working Group, 2016
• Recommended Adjustments to the Performance Funding Model, 2023
• 2024 Work Group recommendations related to underrepresented students
• 2026 New Member Orientation Presentation, June 25, 2026

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Goals of the Model

The General Assembly has found that improving opportunities for Kentuckians and building a stronger economy can be achieved by focusing public postsecondary resources on the following goals:

• Increasing retention and progression of students toward timely credential or degree completion KRS 164.092(2)(a).
• Increasing the number of degrees and credentials earned by all types of students KRS 164.092(2)(b).
• Increasing the number of degrees and credentials that lead to higher salaries, including science, technology, engineering, math, and health fields, and areas of industry demand KRS 164.092(2)(c).
• Closing achievement gaps by increasing credentials and degrees earned by low-income, underprepared, underrepresented, and nontraditional-aged students 164.092(2)(d).
• Facilitating credit hour accumulation and transfer of students from KCTCS to four-year postsecondary institutions KRS 164.092(2)(e).

These goals support Kentucky’s broader educational attainment and workforce development priorities by connecting state investment to student success, completion and economic opportunity. KRS 164.092(3)(a).

Benefits of Performance Funding

Performance funding connects state investment in higher education to outcomes that matter for students, families, employers and the Commonwealth. The model rewards institutions for progressing and graduating students, producing credentials in high-demand fields, supporting transfer and improving outcomes for low-income, underprepared, underrepresented and nontraditional-age students. KRS 164.092(2), (6), (8).

By aligning funding with completion, workforce readiness and institutional progress, the model supports Kentucky’s efforts to increase educational attainment, strengthen the state’s talent pipeline and maximize the return on public investment in postsecondary education. KRS 164.092(3)(a), (13)(a).