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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Statute and Regulations

• 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

Postsecondary Education Working Group Resource Materials

• Postsecondary Education Working Group meetings records archive
• 2016
  • Goal and Guiding Principles (Sept. 2016)
  • Report of the 2016 Postsecondary Education Working Group (Dec. 2016)
• 2020
  • Report: Recommendations of the 2020 Postsecondary Education Working Group (Dec. 2020)
  • Summary of 2020 PEWG Recommendations and Consensus Document (Dec. 2020)
• 2023
  • Report: Recommendations of the 2023 Postsecondary Education Working Group (Dec. 2023)
• 2024
  • Report: Recommendations of the 2024 Postsecondary Education Working Group (Dec. 2024)
• 2026
  • Transmittal Letter: Fiscal 2026-27 Performance Fund Distribution (May 2026)
  • Postsecondary Education Working Group New Member Orientation Presentation (June 2026)
  • Survey: Performance Funding Model (June 2026)
  • Survey Results: Performance Funding Model (July 2026)
  • Data Request, Dual Credit Matriculation to Same Institution (Aug. 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).