Higher Education Funding Allocation Model Changes

The act changes the higher education funding provisions, effective for the 2027-28 state fiscal year. Under current law, a state institution of higher education's governing board's annual fee-for-service contract includes funding calculated based on 3 components: Ongoing additional funding, performance funding, and temporary additional funding. The act:Changes the name of the funding from 'performance funding' to 'results-informed funding';Redefines terms and metrics that are used to determine results-informed funding; andReorders the components and eliminates current statutory language that requires sequential calculation of the components.

For the 2026-27 state fiscal year, the act prohibits the commission on higher education from allocating money to nonpublic institutions of higher education, private institutions of higher education, or proprietary institutions of higher education for it students under a financial assistance program or a work-study program.(Note: This summary applies to this bill as enacted.)