Georgia, joining several other states, will now consider a new formula to fund its state colleges.

According to an article by Laura Diamond in the Atlanta Journal-Constitution:

After decades of funding colleges based on how many students they enroll, Georgia will start work on a formula that emphasizes how students perform and how long it takes them to graduate. Gov. Nathan Deal appointed a committee Thursday to recommend changes to the funding formula by Dec. 1, 2012. The group is expected to look at graduation rates, retention rates and other targets.

“The current funding formula is based on student enrollment but not student completion,” Deal said in a statement. “It rewards institutions for increasing the number of students but does not consider whether or not institutions are successful in educating those students. I want to incentivize college completion.”

It’s sort of unclear, however, that funding based on outcomes will actually improve outcome. Research indicates that number one reason students drop out of college is financial pressure.

As a result of changes to the state’s HOPE Scholarship program in March, college recently became dramatically more expensive for most students in Georgia’s state institutions. That probably won’t help improve completion very much.

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Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer