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In this study, we demonstrate how state policies aimed at improving degree attainment play out at the institutional level and can unintentionally disadvantage campuses that serve the students who stand to benefit the most from a college education. Through interviews with more than 40 campus employees, our study examines the response of two strikingly different community colleges to the new outcomes-based funding model adopted as part of the 2010 Complete College Tennessee Act. This study highlights the disproportionate impacts of an accountability policy on a campus serving students with lower resources and academic credentials. The findings suggest the need for additional support and capacity-building during policy implementation, particularly for institutions with largely underserved populations.