IBHE - November 23, 2011 George Reid, Executive Director...

November 23, 2011

George Reid, Executive Director,

Bob Blankenberger, Deputy Director, and

Alan Phillips, Deputy Director

Illinois Board of Higher Education

431 E. Adams, 2nd floor

Springfield, IL 62701-1404

RE: Performance-Based Funding Unresolved Issues

Gentlemen:

At the September 28, 2011, Performance Funding Steering Committee meeting, we were charged with reviewing

eight issues that were unresolved at the full committee level. Below is our final report.

Unresolved Issues

1. How do you finance the Performance Funding effort?

The main unresolved issue concerning this principle is whether new funding will be available or if a "carve out"

is envisioned to finance Performance-Based Funding. Of primary concern is that during a stressful budgetary

environment, any further budget cuts may have a negative impact on student success outcomes. We

recommend that Performance-Based Funding be supported with new state funding and serve as a focal point for

discussions on the importance of higher education to the future of the State of Illinois.

The spirit of the legislation for Performance-Based Funding is to provide positive incentives to all institutions to

graduate more students. In keeping with this spirit, Performance-Based Funding should be financed with

additional money and our recommendation is that we seek increased funding for this effort. As colleges and

universities are currently building budgets for 2013, we believe it is not logical to carve money out of a current

budget process when we have not established the baseline. We propose to present the metrics and benchmark

from our June 30, 2012 numbers. This would be very transparent and institutions then would have time to

review data elements. Then at the end of the year, June 30, 2013, universities and colleges would receive

additional funds for meeting their performance goals.

We believe this timeline allows time for buy-in from the system and is fair for our colleges and universities.

Timeline

January 2012 – June 2012 Establish and build institutional capacity for collecting and

analyzing data July 2012 Provide benchmark data June 2013 Evaluate and receive Performance-Based Funding





Unresolved Issues Memo

November 23, 2011

Page Two

2. To what extent do you hold institutions harmless as performance funding is phased in, if at all?

Performance Funding should be implemented in two phases, addressing short-term challenges and then focusing

on the longer term. In the short term, it will be important to give the universities time to implement changes in

campus policies and procedures and begin data collection. During this time the universities should not be held

accountable for improved performance on all metrics. The focus in the early years should be about change in

the university processes and engagement in the positive spirit of the change. After several years, the hold

harmless provisions can be dropped, since data will be in place on the efforts put forth in the short term and

implementation of agreed upon outcome metrics can be adopted as measures of performance.

3. What should be the extent of a stop loss provision, if implemented?

This unresolved issue is related to #1, and the importance of a stop loss provision will depend on the amount of

funding dedicated to this program. The focus of the program is on improvement. Therefore, each institution

should be able to work toward mutually established goals. Over the short time period, organizational structures

and programs may not be in place at all institutions, so a stop loss provision may be higher. After several years,

no stop loss should exist.

4. How do you differentiate between the different types of four year institutions (i.e., Comprehensive vs.

Research)?

We recommend that institutions be differentiated by:

Mission

Carnegie Classification of Institutions of Higher Education

Demographic Profile (Pell recipients, race/ethnicity, 1st generation, etc.)

5. What qualifies as an Underserved or Underrepresented Student

For the purposes of Performance-Based Funding decisions, underrepresented and underserved students will be

defined as:

a. Race/ethnicity for students traditionally underserved in higher education (African American, Hispanic,

Native American)

b. Students who are receiving needs-based financial aid, i.e., Pell, MAP, and Veterans) and

c. Students requiring developmental courses.

We feel these criteria are simple and reliable ways of ensuring that populations that have been historically

underrepresented in college completion, i.e., ethnic/racial minorities, first generation, disabled, veterans,

urban/rural, and non-traditional students, will be included. On another dimension of this issue, we believe that a

Performance-Based system needs to provide additional weighting to students who are at risk due to financial

and academic preparation challenges. Including race/ethnicity will capture historic underserved issues. Adding

additional weights to the other variables will capture affordability and preparation challenges for all students.





Unresolved Issues Memo

November 23, 2011

Page Three

6. How do you address Affordability?

The committee acknowledges that affordability is a very critical issue and concern for student completion in

higher education. With that said, we believe that the issue of affordability is critical, but bigger than

Performance-Based Funding and recommend that the issue continue to be in the legislature. Continued funding

for PELL and MAP is critical to support Performance-Based Funding.

7. How do you ensure that quality is not compromised?

Performance Funding can and should support quality improvement. As stated in #1, budgets are already

stressed, and Performance Funding should be funded with new money rather than a carve out of existing

programs. To address quality, it will be important that colleges and universities approach institutional changes

through shared governance processes, including contributions by the faculty senates, and college and university

curriculum committees.

Implementing metrics that incentivize completion must be done without reducing standards for learning

outcomes and must be complemented by intervention and support programs for struggling students. Moreover,

measures of employment data, licensure and certification, and matriculation to graduate school should be

addressed in an IBHE annual report.

8. Contributions to economic development (Public Agenda Goal 4)

Higher education is a significant contributor to the creation of a vibrant economy in Illinois. We believe that if

the state’s economy is to recover from its recession and remain productive, the role of higher education must be

to produce the programs and the human resources to accomplish that goal. A Performance Funding model

should allow each college and university to justify its role in the creation of both the programs and the human

resources. Improvement in the number and quality of college graduates and employer-recognized certificate

holders will contribute to economic development. It is important to also recognize the significant contributions

from research and resulting patent, licensing, and business start-ups.

Sincerely,

Rita Cheng, Southern Illinois University Carbondale

Tim Harrington, Chicago State University

Elaine Johnson, Illinois Community College Board

Anne Ladky, Women Employed

Ed Maloney, Illinois State Senator

Santos Rivera, Northeastern Illinois University

Wayne Watson, Chicago State University

Office of the Dean, College of Business www.business.siu.edu

www.siu.edu

Rehn Hall – Mail Code 4619 ▪ Southern Illinois University Carbondale

1025 Lincoln Drive ▪ Carbondale, Illinois 62901 ▪ 618 | 453.7960 ▪ Fax: 618 | 453.7961

Via Email

November 14, 2011





431 E. Adams, 2nd floor

Springfield, IL 62701-1404

Gentlemen:

The accompanying Excel spreadsheet contains nine proposed metrics for public universities and five proposed

metrics for community colleges. These metrics result from campus engagement on two levels. Chancellor Cheng

made a presentation on the Performance Funding process and the issues surrounding Performance Funding at the

campus wide fall faculty meeting in late October. In addition, the Campus Performance Funding Advisory Group

continued to meet and provide input to the two steering committee members from SIU.

In our design of the metrics, we kept the following principles in mind:

1. Metrics must support the goals of the Public Agenda and the goal of 60% by 2025;

2. Performance Funding metrics should be kept to a minimum and the computation should be widely understood.

3. The Tennessee Model can be utilized to allow the same metrics be used for all public universities and all

community colleges, but at the same time different missions can be emphasized by negotiating different weights for

each institution.

Public Universities

The first four metrics for public universities are completion based and gives premium treatment for sub-populations.

Degrees granted measure the actual raw number of degrees earned at the institution. The metric can be influenced

by growth and actions by the university designed to retain and graduate more of the students that begin at the

university. Degrees earned per 100 FTE also offer a measure of the university’s contribution to educational

attainment of the state’s population, measured from a different angle. It is more a measurement of how well the

university does at moving the students it has through the curriculum.

Sub Population Premiums--The dual use of MAP, Veterans or Pell eligibility and ethnic based identifiers should

cover the groups intended by the legislature when it used the following language: “…students who are

academically or financially at risk, including…low-income students, and students traditionally underrepresented in

higher education.” First generation students are also specified in PA 97-320, but might not be captured by the other

sub population premiums. As a result first generation students are included as a separate sub population. Data

availability for first generation students may present a problem. At SIU, there has been a question on the

undergraduate application about whether the applicant’s parents had earned degrees for two years. It is unclear how

accurate the self-reported data are. The Steering Committee should make a decision whether first generation

students should be included as a premium in the first iteration or whether the premium for first generation students

should be delayed until reliable data can be generated. Degrees by females in male dominated fields is a response to

the small percentage of females in certain degree tracks (hard sciences and engineering are examples). The use of

Proposed Metrics Memo Page 2 degrees by transfers is intended to encourage public universities to accept and graduate transfer students from

community colleges and other four year institutions. The inclusion as a separate premium of degrees earned by

remedial students recognizes that graduating remedial students requires extensive and intentional effort and costly

support systems on the part of the university. The final premium sub population is for degrees in high demand

fields. Instead of pre determining a set of degrees (like STEM and health care) we feel it is preferable to determine

which degrees warrant a premium based on market demand in the state. Consideration was also given to including

students with disabilities and students from geographic areas with low educational attainment. Data on students

with disabilities are difficult to capture, and a reliable count is unlikely. Geographical data at this time are not clear.

The census data available have bachelor’s degree holders but the other variable is some college or associates degree

holders. As a result if we combine the two we do not necessarily have associate or undergraduate degree holders. In

addition there is no data that supports the proposition that one who earns a degree from a low educational attainment

area is likely to return to that area. In fact if there are no employment opportunities in the degree holder’s

geographic area, then he/she is likely to leave the area in search of degree appropriate employment. The premium

values in the spreadsheet (.8 and 1) are intended to be illustrative. This is a decision for the Steering Committee as

these premium values need to be constant statewide.

The second set of metrics attempt to measure progress to a degree. The first, measures how successful the

institution is at addressing deficiencies students bring with them to the campus. Not all four year schools provide

remedial education and those that do not can negotiate this metric down to zero. It is important that those public

universities that provide remedial instruction be rewarded for doing so successfully. The second metric is another

important momentum point measure. Public Universities that successfully engage first year students and assure they

complete at least 24/12 dramatically increase the odds those students will graduate.

The third set of metrics is intended to shorten time to degree, without the inherent problems associated with IPEDs’

cohort based time to degree measurements (graduation rates within 4 and 6 years). By concentrating on hours per

degree, schools are not penalized if students must stop out for family, financial or other reasons. In addition, by

measuring hours per degree, public universities will have an incentive to examine degree requirements of more than

120 hours. The selection of 144 hours and 36 hours per academic year allows 20% more hours than typical 120

credit hours for an undergraduate degree. Excess hours per degree typically come from students changing majors,

losing hours upon transfer, and students taking courses out of curiosity. Institutions will never be able to eliminate

all excess hours, but intense advising and career counseling, along with more complete articulations can limit excess

credit hours. The corresponding metric for transfer students attempts to measure just the hours earned at the degree

granting four-year institution. An example is offered for clarification. Transfer student A is admitted to the

university with 80 credit hours from institution B. A intends to pursue a degree in engineering. It is determined that

A must take 15 hours per semester for five semesters to gain the engineering degree, or 2.5 academic years. As long

as A graduates with less than 90 credit hours (36 x 2.5) from the university A’s degree will be included.

The next set of metrics attempts to deal with the quality issue. Overall GPA is a measure intended to detect grade

inflation. Because universities are likely to offer new programs and services to students designed to help students

succeed, some increase in GPA can be expected. Schools should be rewarded for consistently maintaining or

producing small increases in GPAs. Substantial GPA increases, however may indicate lower standards are being

used to increase completions, and should not be rewarded, in fact it may call for a deduction on the quality score.

Campuses should be rewarded for increases in scores on nationally normed standardized tests given to a

representative sample of undergraduate students on an annual basis. Two examples are the Collegiate Assessment

of Academic Proficiency (CAAP), administered by American College Testing and keyed to the ACT; and the

Collegiate Learning Assessment (CLA), administered by the Council for Aid to Education. The percentage of

accreditable programs that are accredited brings an external measure of the quality of a campus’s programs and also

gives an incentive for university leadership to seek specialized accreditations for programs. The ratio of full time to

part time faculty was also considered and may be an appropriate metric.

The final set of metrics attempts to deal with research activities. The obvious metric is extramural funding

expenditures. That measurement alone however may not be sufficient to fairly evaluate the research enterprise of a

public university with the prospect of fewer federal dollars being available over the next several years.. One of the

purposes of research at a public university is the exposure of students to new knowledge and to train researchers for

the future. Measuring the number of undergraduate and graduate students involved in the research activities

Proposed Metrics Memo Page 3 captures that aspect. In pursuit of goal four of the public agenda, measuring patent and other registration

applications, commercial ventures resulting from research activities, and licensing revenue generated attempts to

capture how public universities research activities contribute to meeting the economic needs of the state. Finally,

including non-science based activities by students in the community recognizes the practical application of skills

students acquire in their fields of study. The scaling shown in the worksheet is illustrative only. The actual scaling

of the data must be done once actual numbers populate the computation.

Community Colleges

The metrics for community colleges mirror many of the metrics for four year schools. The first two metrics

emphasize completions. Again, the number of completions is measured in the first metric and degrees per 100 FTE

is measured in the second metric. The premium sub populations are the same as proposed for the four year schools.

The third metric measures how well the community college transfers its students to four year schools for degree

completion. It is not necessary that students earn an associate’s degree or a certificate before transferring. For some

students it might be more efficient for them to transfer before completing the degree. All that is necessary is the

student transferring. This allows Community Colleges to benefit equally for degrees completed and transfers to four

year schools without a degree.

The fourth set of metric attempts to measure how efficiently community colleges transfer students to four year

schools. Like the four year schools, we use 120% of the standard 60 hours for an associate’s degree as the measure

of efficiency. This metric is designed to incentivize community colleges to minimize the amount of time its students

spend at their institutions as the students pursue an undergraduate degree. The first metric, transfers with an AS

degree with less than 72 credit hours and only one AS degree. Too often students delay transferring to a 4-year

institution in order to complete additional associate degrees at a community college thereby increasing their time to

degree and diminishing essential financial resources in the process. Choosing an appropriate transfer program of

study at the community college is essential part of enabling students to achieve a Bachelors degree in a timely

fashion while minimizing their educational debt. Associate of Arts or Science degrees are not designed as terminal

degrees in a field of study. Rather, they are intended for the student who plans to transfer to a university and

complete a bachelor’s degree. Any additional associate degree completion is redundant, wastes valuable resources

and creates dissatisfaction among students with respect to the transfer value of the additional credit hours taken at

the community college. The second metric is intended to limit wasted or lost hours at the community college level.

As already discussed, transferring without a degree can be an efficient tactic in earning an undergraduate degree.

That efficiency can be lost, however if the student ends up with excess credit hours for the progress made toward the

undergraduate degree at the community college. Effective counseling and advisement at the community college

level can limit the number of wasted credit hours. The third metric is similar, except the transfer is made with a

completed IAI GECC curriculum. Completing only general education requirements rather than an Associates

degree at the community college level is particularly important when a student’s intended baccalaureate degree

requires a tightly sequenced major curriculum that does not allow for elective hours such as Radiologic Sciences,

Engineering, and Music. The IAI GECC certificate requires 37-41 total hours and is recognized throughout the state

as satisfying a common core applicable to baccalaureate degrees. It is the most efficient option for formal

completion of general education available to the Illinois college student. That efficiency can be lost however if the

community college allows the student to accumulate excess credit hours. The fourth metric measures how

efficiently the community college delivers AAS degrees. The Associate of Applied Sciences degree is technically-

oriented and provides occupational skills and competencies that often leads to employment within the field and

typically carry required credit hours of over 70. Students who do not transfer after the AAS degree should

accumulate no more than 120% of the required credit hours. The final metric measures how well the community

college enables transfers of AAS degree earners. Despite the high number of required credit hours, AAS degrees

can lead to efficient transfers to like programs at four year schools. Although the AAS degree does not satisfy core

curriculum requirements, when it is articulated as a two + two transfer option the value of the AAS degree is greatly

enhanced. As a result, the metric requires earning the degree with less than 120% of required credit hours and

transfer to a four year school under an articulated two plus two option. This will incentivize community colleges to

seek such agreements. It might be worth the effort to require no more than 120% of some specified number of credit

hours for an AAS degree (like we do for the bachelors and AS degrees) to spur review of required credit hours for

AAS degrees at the community college level.

Proposed Metrics Memo Page 4

The next two metrics mirror the momentum point metrics discussed in the public university section, above.

Although no metrics are proposed for quality at the community college level, it might be appropriate to use the same

quality metrics proposed for the public universities. In addition research activities at the community college are not

a major part of the mission, however economic development of the area served by the community college is. A set

of metrics measuring that part of the mission might be appropriate.

Regards

Rita Cheng

Chancellor

Allan Karnes

Associate Dean

Four Year Schools 3 year Average Premium Data +Number Premium Value Premium

Certificates and Undergraduate Degrees xxx xxxSub Population Premiums

MAP, Veterans or Pell Eligible Students xx 0.8 xx * .8 xx

First Generation Students xx 0.8 xx * .8 xx

Black xx 1 xx * 1 xx

Hispanic xx 1 xx * 1 xx

Am. Indians/Alaska Natives xx 1 xx * 1 xx

Females in Male Dominated Fields xx 0.8 xx*.8 xx

Degrees earned by Transfers xx 0.8 xx *. 8 xx

Degrees earned by Remedial Students xx 1 xx*1 xx

Degrees in High Demand xx 1 xx * 1 xx

Certificates and Degrees after Adjusting for sub population premiums xxxx

Transfers=definition used in IPEDs reporting

Four Year Schools Premium Data +3 year Average Premium Value Premium

Undergraduate Degrees per 100 FTE xxx xxxSub Population Premiums







Degrees earned by Transfers xx 0.8 xx *. 8 xx



Undergraduate Degrees per 100 FTE after Adjusting for sub population premiums xxxx

Transfers=definition used in IPEDs reporting

Each of the sub populations require a degree per 100 FTE computation


Graduate Degrees xxx xxxSub Population Premiums



Black 1 xx 1 xx * 1 xx




Females in Male Dominated Fields xx 1 xx * 1 xx

Graduate Degrees after Adjusting for sub population premiums xxxx


Graduate Degrees per 100 FTE xxx xxxSub Population Premiums



Black 1 xx 1 xx * 1 xx




Females in Male Dominated Fields xx 1 xx * 1 xx

Graduate Degrees per 100 FTE after Adjusting for sub population premiums xxxx


Students Completing remedial courses and a college-level course in the same subject within two academic years of entry. xxx xxxSub Population Premiums






Students who demonstrate proficency in remedial subject after adjusting for sub-population premiums. xxxx


Full time/Part time Students who Complete at least 24/12 credit hours in their first year. xxx xxxSub Population Premiums






Remedial Students xx 1.5 xx*1.5 xx

Students who complete at least 24/12 credit hours in their first year after adjusting for sub-population premiums. xxxx

Note: Includes both first year first time and transfers


Undergraduate Degrees earned with fewer than 144 hours (Non transfer students) xxx xxxSub Population Premiums






Remedial Students xx 1 xx*1 xx

Undergraduate degrees earned with less than 144 hours after adjusting for sub-population premiums. xxxx


Undergraduate degrees earned by transfer students with less than 36 hours per academic year at institution xxx xxxSub Population Premiums






Remedial Students xx 1 xx*1 xx

Undergraduate Degrees earned by transfers with less than 36 hours peracademic year after adjusting for sub-population premiums. xxxx

Four Year SchoolsQuality Data

Results from nationally normed, standardized exam results (such as the CLA or the CAAP) administered annually

to a representative sample of undergraduates. (Rewards for increases in the scores) xxx

Percentage of accreditable programs that are accredited

xxx

Overall GPA of all students

xxx

xxxx

Four Year Schools 3 year Average ScaledResearch Activities Number Scale Data

Total Extramural Funding Expenditures xxxxxxx In millions*2 xxxExample 86,000,000 86 * 2 172

Undergraduate Students involved in Research xxx xxx

Graduate Students involved in Research xxx xxx

Patents/Copyrights/Trademarks applied for xx *2 xxx

Commercial ventures entered into based on research performed at University xx *10 xxx

Licensing revenue xxxx /10 xxx

Performances and Service Activities in the Community by students in their field of study xxx xxx

Research activities after scaling xxxx

Community Colleges 3 year Average Premium Data +Number Premium Value Premium

Certificates and Associate Degrees xxx xxxSub Population Premiums









Certificates and Degrees after Adjusting for sub population premiums xxxx


Degrees per 100 FTE xxx xxxSub Population Premiums









Degrees per 100 FTE after Adjusting for sub population premiums xxxx

Each sub population will require a separate computation.


Transfers to Four Year Schools xxx xxxSub Population Premiums






Females in Male Dominated Fields

Remedial Students with Deficiencies Remediated


Transfers to 4 year Schools after Adjusting for sub population premiums xxxx

Community Colleges 3 year Average 3 year AverageTime to Transfer and Degree Number NumberTransfers to Four Year Schools:

With an Ass. Degree and less than 72 hours1 xxx

Without a degree and less than 36 hours

per academic year xxx

Completed IAI GECC transfers with less

than 50 hours xxx

AAS degree with less than 120% of the required

credit hours-And no transfer. xxx

AAS degree with less than 120% of the required

credit hours and transfer to a 4 year school as

under a 2 + 2 articulation agreement xxx

Total Time to Transfer and Degree xxxx

1. In addition, only one Ass Degree should be earned before transfer. CC will not be able to

count students who tranfer with more than one Ass. in Arts or Science degree.


Students Completing remedial courses and a college-level course in the same subject within two academic years of entry. xxx xxxSub Population Premiums






Students who demonstrate proficency in remedial subject after adjusting for sub-population premiums. xxxx


Full time/Part time Students who Complete at least 24/12 credit hours in their first year. xxx xxxSub Population Premiums






Remedial Students xx 1.5 xx*1.5 xx

Students who complete at least 24/12 credit hours in their first year after adjusting for sub-population premiums. xxxx

Note: Includes both first year first time and transfers

UNIVERSITY OF ILLINOIS AT URBANA-CHAMPAIGN

TM Abbas Aminmansour, Chair Faculty Advisory Council Illinois Board of Higher Education c/o 117 Temple Buell Hall, MC-621 Champaign, IL 61820 USA

office 217-333-2834 • cell 217-355-2345 • fax 217-244-2900 • [email protected]

November 21, 2011 Dr. George Reid, Chair Performance Based Funding Steering Committee Illinois Board of Higher Education Dear Dr. Reid: The Faculty Advisory Council of the Illinois Board of Higher Education is deeply grateful to the IBHE Steering Committee for its continued efforts to establish metrics for Performance Based Funding in Illinois. We offer our strong support and look forward to seeing the Committee’s recommendations enhance higher education in the state. As you well know, the task of establishing fair and practical metrics for Performance Based Funding at the state level is both complex and challenging. Because one of the Committee’s goals is ensuring that the metrics not lead to unexpected harmful consequences and because the Committee has a tight timeline, we respectfully offer the following recommendations for consideration by the Steering Committee.

1. Establish initial metrics for implementation of Performance Based Funding that are simple, basic, safe and not substantial in size and scope.

2. Continue to work beyond your upcoming deadline on further careful development of metrics to implement Performance Based Funding in a more comprehensive way in the following years.

3. Serve as a body for annual review of Performance Based Funding. We are impressed with the composition of the steering committee and earnestly hope its members, wanting to see their work bear fruit, will continue to serve the state in this capacity.

We recognize that items 2 and 3 above may require approval of other bodies. At the same time, it is our belief that these recommendations will help establish the solid foundation and the responsible oversight necessary for a model performance based funding program that will indeed enhance higher education in the state. Many thanks again to the Committee both for the hard work it has already put into this project and for its consideration of our recommendations. Sincerely,

Abbas Aminmansour, Chair Faculty Advisory Council, Illinois Board of Higher Education cc: IBHE-FAC

PerformanceMeasure Segment

Unit ofMeasurement Magnitude

Scaling Factor

AllowableWeighting

Range Note1st to 2nd Yr Retention Overall

African AmericanHispanicLow Income

Transfer Retention OverallAfrican AmericanHispanicLow Income

BA/BS Degrees Total(3 year average) African American

HispanicSTEM

MA/MS Degrees Total(3 year average) African American

HispanicDoctorates Total(3 year average) African American

HispanicSTEM

x 10 Ratio equalizes across institutions.

Recognizes institutions with a research emphasis

Dollars Millions ÷ 1,000,000Research Expenditures 0%-20%

Sample Performance Measures

÷ 10

Actual numbers favor larger institutions. Adding minority and STEM numbers

recognizes institutions that are addressing these populations.

Delta Project: Degrees per 100 FTE

Percentage Hundreds x 1

Percentages equalize across institutions.

Adding retention percentages for at-risk students recognizes institutions that are

addressing these populations.

Percentage Tens

20%-50%

20%-50%

10-30%

Actual Number of Degrees

Thousands

Measure SegmentScalingFactor Sub-Score Score

ScaledScore Sub-Score Score



ScaledScore

1st to 2nd Yr Retention Overall 68 94 81 58African American 49 75 70 40Hispanic 69 65 60 40Low Income 69 65 60 35

Transfer Retention Overall 72 95 90 70African American 63 95 90 65Hispanic 72 95 90 65Low Income 70 85 85 65

Retention Score x 1 532 532 669 669 626 626 438 438

BA/BS Degrees Total 1543 7378 3349 681(2008-2010 average) African American 153 427 232 571

Hispanic 369 447 473 47STEM 166 446 437 47

MA/MS Degrees Total 553 2802 1877 311(2008-2010 average) African American 50 112 116 196

Hispanic 63 90 112 25STEM 68 159 135 10

Degree Score ÷ 10 2965 297 11861 1186 6731 673 1888 189

2009 Delta Degrees per 100 FTE x 10 25.4 254 27.2 272 26.5 265 20.6 206

÷ 1,000,000 $0 $0 $300m 300 $340m 340 $0 $0

Examples of Steps 1-4 presented above: Step 1. Identify the performance measures or metrics that support the achievement of the state goals. Step 2. Collect the data on the selected performance measures. Step 3. Award an additional premium for the production of certain desired outcomes (e.g., inclusion of sub-groups for additional points). Step 4. Normalize (scale) the data so it is somewhat comparable across measures (e.g., scaling factors).

Next: Step 5. Weight each of the performance measures to reflect the priorities of the measures to the mission of the institution. Step 6. Multiply the scaled data by the weight to produce the weighted results. Step 7. Use the weighted results (or Total Performance Value) to distribute the performance funding.

Research Expenditures (in millions)

Chicago State

Calculations for Sample Performance MeasuresUsing 2009 Performance Data

(Note: Values in Red are not real institutional data but are provided for illustrative purposes only.)NEIU UIUC UIC

ILLINOIS COMMUNITY COLLEGE SYSTEM

Performance Based Funding

Principles and Metrics

The Illinois community college system has adopted five guiding principles for performance

based funding.

1. Performance based funding is not about money, but about performance. However,

performance based funding, when tried in other states, has been most successful when the

state added funding to the budget for performance incentives. All higher education

leaders are pledged to the success of performance based funding; and therefore, the

needed new funds must be added to the FY2013 budget.

2. Universities and community colleges should have separate funding and metrics for the

performance initiative. Dr. George Reid has stated at many public meetings that

performance funding would recognize the different missions of Illinois’ four-year

universities, research universities, and two-year public community colleges.

3. Community colleges should not compete against each other for their performance based

funds. The 39 community college districts differ widely in available resources per

student, diversity, and student academic preparedness prior to enrollment, as well as in

the characteristics, socio-economic status, and labor markets of the districts they serve.

4. To determine performance within specific metrics, each district will be measured against

changes from year to year to establish district performance. That performance increase or

decrease should not be compared to other districts statewide to allocate funds.

Performance based funding is about enhancing the performance of each college.

5. If no new state funds are appropriated for performance, the community college system

believes that performance metrics should be implemented without financial impact.

The six community college performance measures are:

1. Degree and Certificate Completion: Students completing a degree or certificate.

2. Degree and Certificate Completion of “At Risk” students: The community college

system, for this metric, is defining “At risk” students as those who are academically or

financially at risk of not achieving their educational goals. The metric will measure

student completion for students receiving a Pell grant and/or students who were enrolled

in remedial education.

3. Transfer to a four year institution: Full-time and part-time students who transfer to

another institution of higher education within three years for full-time students and five

years for part-time students.

4. Remedial and Adult Education Advancement: Remedial students who advance to

college-level courses and adult education students who advance to remedial or college-

level courses.

5. Momentum Points: First-time/part-time students completing 12 credit hours, first-

time/full-time students completing 24 hours in the first year, and adult education students

moving a “grade” level based on pre- and post-test performance. For purposes of this

metric, completion of remedial courses is included and adult education grade levels are

based on NRS standards.

6. Transfer to a community college: Full-time and part-time students who transfer to a

community college within 18 months of leaving the initial community college. Lateral

transfer is recognized as an important performance measure because lateral transfer

students remain in higher education and reasons for lateral transfer are often prompted by

changes in students’ home residence, employment, or pursuit of a program not offered by

the home institution.

AN ASSESSMENT OF PERFORMANCE FUNDING ISSUES

I applaud the progress made in addressing issues of performance funding in the context of Public Act

97-320 (HB 1503) and Illinois Public Agenda Goals. The proposed four-year university performance

model as presented at the October 24, 2011 steering committee meeting delineates some of the

performance measures that might be addressed by four-year universities. Most of these parameters have

clear implications for community colleges. However, some of the position papers and discussions place

too great of an emphasis on the need for additional appropriated funds to achieve goals that are essential

in addressing the educational demands of our society. The following key principles must gain greater

traction in our deliberations and actions.

Taking into account current economic realities and the immense educational challenge that

educational institutions face, the assumption must be made that meaningful and significant

progress can be made toward achieving a significant number of performance measures without

additional resources. In fact, performance funding should not be viewed as primarily a way to

acquire new funds. Based on our current enrollment performance model, essentially all new

operating funds have been acquired through tuition and student fee increases. Performance

funding should be viewed as simply another way of enhancing institutional improvements with a

focus on meeting the needs of underrepresented groups.

Beginning with each institution’s improvement plan, what identifiable metrics in the institution’s

existing plan are consistent with and will reinforce indicated performance measures relative to

the enhanced education of underrepresented groups? In general, for each institution to have

maximum impact, a targeted and relative small number of metrics should receive special focus.

Although the need for additional resources is real, its need must not be allowed to interfere with

substantive progress toward achieving critical performance measures or ongoing institutional

improvements. An effective process for acquiring significant new resources can only be achieved

through the implementation of an independent and highly deliberate strategy. Just as

affordability was considered too complicated to be a component of our performance funding

model, the issue of acquiring additional state resources is even more perplexing and merits its

own unique agenda.

We all know that these are difficult times for the country, state, local government, and higher

education, and in the short term, there is little reason for optimism. Therefore, we must be much

more aggressive in conveying the value of effective educating underrepresented groups. Clearly,

the public views education as having tremendous value. To a significant extent, this is a major

reason for the numerous new proposals submitted bimonthly to the IBHE by proprietary

institutions. Performance funding should be seen simply as another opportunity for public

institutions to accelerate institutional improvements in the specific area of educating

underrepresented groups.

Elmer Washington

November 20, 2011

IBHE - November 23, 2011 George Reid, Executive Director...

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