Performance-linked funding

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Last updated 3 November 2016
Last updated 11/03/2016

Performance-linked funding helps to improve educational outcomes for students and employers ─ and increases value for taxpayers’ money. This section explains how performance-linked funding works, and includes performance information.

Performance-linked funding encourages all Student Achievement Component (SAC) funded tertiary education organisations (TEOs) to reach an acceptable standard of educational performance.

Key features of the performance-linked funding framework

The performance of each SAC-funded TEO is measured at four grouped New Zealand Qualifications Framework (NZQF) levels: 1-2, 3-4, 5-6 and 7-8. In order to create a level playing field, performance-linked funding treats all TEOs in each grouped qualification level the same.

TEOs performing above the 50th percentile in each grouped qualification level receive 100 percent of their funding.

A maximum of 5% of a TEO's funding, at each of the grouped qualification levels, is based on the TEO's performance in the previous year(s) against up to four of the following educational performance indicators (EPIs)

  1. Qualification completion rate: this measures successful qualification completions as a proportion of total enrolments in a given year.
  2. Course completion rate: this measures successful course completions as a proportion of course enrolments in a given year.
  3. Retention (completion/continuation): this measures the proportion of students in a given year that complete a qualification, or re-enrol at the same organisation in the following year.
  4. Progression: this measures the proportion of students who progress to a higher level of study after completing a qualification in the previous year.

These performance indicators were selected because they reflect a TEO’s performance in relation to the educational achievement of its students.