Tennessee to Provide Better Support for Good-Paying, In-Demand Careers

NASHVILLE – Tennesseans for Student Success (TSS) is applauding changes to the Outcomes-Based Funding (OBF) formula approved today by the Tennessee Higher Education Commission.

The OBF revolutionized the way higher education was funded in 2010 by creating incentives for institutions to award credits, graduate students on time, or, for two-year community colleges, transfer students to four-year institutions. In 2022, Tennessee added a Workforce Investment Premium to the formula to provide additional incentives for institutions to award degrees with the potential for a greater return on investment.

Changes approved today will update the Workforce Investment Premium to eventually remove funding from programs that aren't in demand, and direct it instead to fields where jobs are needed and growing.

"Tennessee's Outcomes-Based Funding formula has done a lot of good for our students over the years, but the job market doesn't stand still, and our funding priorities shouldn't either," said Lana Skelo, TSS President and CEO. "These updates to the Workforce Investment Premium bring the formula in line with where Tennessee's economy is headed, steering students toward the programs that offer the strongest opportunity and long-term earning potential, while making sure our graduates have the skills employers are actually looking for in the jobs of tomorrow."

 To qualify for Workforce Investment Premium, education programs must:

• Lead to a career with median earnings of at least $43,196 after five years.
• Have a job growth outlook of at least 0.8 percent.
• Or be eligible for the Workforce Pell Grant.

Changes approved today would also establish an annual process for institutions to nominate programs for the incentive that meet a regional workforce need or are experiencing increased student interest.