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Aurora Institute


Performance-Based Funding & Online Learning: Maximizing Resources for Student Success

Author(s): Susan Patrick, Amanda Brown, John Myers, John Watson, Justin Silverstein

Organization(s): Augenblick, Palaich and Associates Inc., iNACOL, Evergreen Education Group

Issue(s): State Policy, Fund Innovation

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The report is focused on performance-based funding and the costs in online learning programs. This study examines the variety of funding models for K-12 online learning, explores adequacy costs, and outlines the guiding principles of performance-based funding to reward outcomes. As state policy makers consider performance-based funding options in education, this report provides recommendations and literature to expand the research base in support of equity, closing the achievement gap and increased student outcomes.

There is a new conversation taking place in public education on creating systemic incentives through school finance to encourage schools to innovate and be rewarded for positive student outcomes and performance. What if education funding was not based on seat-time, but on rewarding student performance? Performance-based funding is a term that captures this new concept.

The concept of performance-based funding is fairly straightforward—reward public education programs based on measurable student learning performance outcomes including course completion and competency development. It is also important to consider performance-based funding as a multi-step policy evolution from course completion to competency development. It is important to understand the idea that course completion-based funding is a step towards performance-based funding but is not the same as competency-based funding.