Postsecondary Education Working Group begins review of Kentucky’s performance funding model

June 26, 2026

The Postsecondary Education Working Group convened Thursday morning for a new member orientation focused on Kentucky’s performance funding model, beginning a review process that will help inform how state funds are allocated to public colleges and universities in support of student success, workforce needs and the state’s 60x30 educational attainment goal.

During the meeting, members, which include legislators and university presidents, received an overview of the model’s history, purpose, metrics, funding mechanics and current status from the Kentucky Council on Postsecondary Education's (CPE) finance policy and programs staff. The group is expected to meet monthly through November and submit any recommended changes to the Kentucky General Assembly by Dec. 1. The first meeting is available on the Council's YouTube channel. 

Kentucky adopted performance funding in 2016 to better align state appropriations with statewide goals for postsecondary education, including increasing retention and progression, producing more degrees and credentials, growing credentials in high-demand and higher-wage fields, and closing achievement gaps for low-income students and adult learners. The model was also designed to address limitations of the former funding approach, which was based largely on prior-year funding levels and did not account for changes in enrollment, program mix or student outcomes.

“This review is about making sure Kentucky’s funding model continues to support the outcomes that matter most for students, families, employers and communities,” said CPE President Aaron Thompson. “Performance funding is one of the tools we use to connect public investment with progress - more students staying on track, more credentials being completed and more Kentuckians prepared for high-demand careers.”

The orientation also highlighted the evolution of the model since its creation following the 2016 budget bill, which directed CPE to convene a working group and develop a funding model that included elements of enrollment, mission and performance. The original model was designed to be outcomes-based, mission-sensitive, cost-sensitive, stable, data-driven and simple enough to integrate into the state’s biennial budget process.

CPE staff noted that for several years the model operated with little or no new state funding, which required redistribution among institutions. Beginning in 2022, the General Assembly made significant investments in performance funding. The enacted state budget includes $115 million for the Postsecondary Education Performance Fund in fiscal year 2026-27.

The working group’s 2026 review will examine whether the model continues to reflect Kentucky’s policy priorities, institutional missions and student success goals. CPE staff will support the group with data, analysis and technical guidance throughout the process.

“Kentucky has made progress in educational attainment, but we still have work to do to reach 60% by 2030,” Thompson said. “That means we must continue to focus on completion, affordability, workforce alignment and student outcomes. This workgroup gives us an opportunity to review the model thoughtfully and ensure it is helping drive the progress Kentucky needs.”