State and Student Support
FY 2021-22 is the fifth year the Kentucky General Assembly used the performance funding model to allocate state appropriations to the public universities and the Kentucky Community and Technical College System (KCTCS). However, it is the first year the Commonwealth has invested new state funds into the model.
From FY 2017-18 to FY 2020-21, the public universities put at risk (i.e., required contributions) approximately 11 percent of their base state appropriations, or $103.4 million. For these first four years, the commonwealth did not contribute any new funds to the performance funding pool. For FY 2021-22, the commonwealth has placed $13.5 million of new state funds in the performance funding pool without requiring any matching contributions by the universities.
The performance funding model is based on 11 metrics primarily focused on student success including bachelor’s degrees produced, earned student credit hours, and undergraduate student retention and progression. The competitive-based model rewards universities with rates of growth that exceed the sector average.
UK has performed extremely well – achieving the highest number of growth rates above the sector average for every year the model has been in use. For FY 2021-22, UK achieved growth rates above the sector average on 10 out of the 11 metrics, earning $6.1 million or 45 percent of the total new state funds.
In addition to tuition price, student aid is another mechanism colleges and universities use to combat affordability challenges for students and families. For the second consecutive year, the University of Kentucky will invest $148 million in institutional student financial aid. In the last 10 years, UK has nearly tripled institutional financial aid.
In fall 2017, the University of Kentucky began a deliberate financial aid strategy to make college more affordable by reducing students’ unmet financial need. The UK LEADS (Leveraging Economic Affordability for Developing Success) Program, which has drawn national attention, targets grants and scholarships to students who have unmet financial need of $5,000 or more. Rigorous analysis over the last several years demonstrates that unmet financial need – when it exceeds more than $5,000 – is one of the leading causes of students not completing their degree programs. From Academic Year (AY) 2020 to AY 2021, overall unmet financial need has declined by 16 percent. UK’s goal is to continue to redeploy institutional aid based on data-informed strategies and predictive modeling that identifies the students whose only barrier to success is financial.