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Funding Tennessee’s Public Colleges and Universities: The Outcomes-Based Funding Formula

Graduation cap and money

November 2017
Authors: Joshua Testa and Courtney Swim

Full Report
Report Summary

The outcomes-based funding formula is a complex funding tool that allocates state funds to Tennessee’s public colleges and universities based on performance. In 2017-18, the formula calculated approximately $913 million in appropriations for higher education and how those funds should be distributed to each institution.  

To help the General Assembly, higher education administrators and stakeholders, and the public understand Tennessee’s outcomes-based funding formula, OREA has created a report that explains how the formula works. Throughout the report, the major components that drive the funding recommendations are explained and accompanied with step-by-step examples. The link above contains the full report in PDF format.  

To supplement the report, OREA has also created several other documents that help explain the formula and how it produces funding recommendations. Each document adopts a different format for explaining the formula, and provides the reader different methods for understanding how the formula works. These include a four-page brief, an infographic detailing the funding recommendation process created by the formula, and a one-page executive summary.

OREA has created a set of publications to help legislators and other stakeholders understand how Tennessee’s nine public universities have performed under the state’s outcomes-based funding formula. The nine publications highlight how a specific university’s funding has changed over time compared to all other universities, and why funding changes have occurred based on performance across the formula’s outcomes.

Austin Peay State University
East Tennessee State University
Tennessee State University
Middle Tennessee State University
University of Memphis
Tennessee Technological University
University of Tennessee, Martin
University of Tennessee, Knoxville
University of Tennessee, Chattanooga

We hope these documents make the state’s outcomes-based funding formula for higher education more understandable and transparent. For any questions regarding the documents, please contact OREA at