Gov. Asa Hutchinson has signed into law a bill that links college and university funding to factors such as the number of students who complete their degrees.
Hutchinson on Wednesday signed the bill that requires the state to adopt a "performance-based" model for funding higher education rather than basing the money on enrollment.
Hutchinson has said he'll call for increasing higher education funding by $10 million in 2018 if the plan was approved.
The state's colleges and universities received about $733 million in the state's current $5.3 billion budget, and that funding would not change in the fiscal year that begins July 1 under the governor's proposed budget.
Hutchinson says the new formula "will encourage and empower" students to obtain their degree, license or certificate in a timely manner.