PRESENTATION TO THE HIGHER EDUCATION TRUSTEES MEETING STATE OF ARKANSAS PULASKI TECHNICAL COLLEGE...

PRESENTATION TOTHE HIGHER EDUCATION TRUSTEES

MEETINGSTATE OF ARKANSAS

PULASKI TECHNICAL COLLEGEDECEMBER 10 , 2010

RICHARD L . PETRICK

Aligning State Resources to Better Promote Student Success

Arkansas Trustees Meeting

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“PERFORMANCE FUNDING IS A METHOD OF FUNDING PUBLIC INSTITUTIONS BASED NOT ON INPUTS, SUCH AS ENROLLMENTS, BUT ON OUTCOMES, SUCH AS RETENTION, DEGREE COMPLETION, AND JOB PLACEMENT….

THE PRINCIPAL RATIONALE FOR PERFORMANCE FUNDING HAS BEEN THAT PERFORMANCE FUNDING WILL PROD INSTITUTIONS TO BE MORE EFFECTIVE AND EFFICIENT, PARTICULARLY IN A TIME OF INCREASING DEMANDS ON HIGHER EDUCATION AND INCREASINGLY STRAITENED STATE FINANCES.”

C C R C W O R K I N G PA P E R # 2 212/10/2010

What Is Performance Funding?


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Performance Funding: Introduction

Why are states turning to performance funding? What are they doing?

How can we align incentives with desired results?For institutions, students, faculty, staff?

What have we learned from previous efforts?What are the pros and cons of performance

funding?What’s happening in Ohio?

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Arkansas Trustees Meeting 4

Performance Funding – Why? The Money Matters

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FY 2009 Higher Education Revenue Sources

Source Amount Note

State + local $ $88.7 billion Even with ARRA $ -- no change from FY 2008

Net tuition $44.5 billion Up ~ 7% from FY 2008

Total $133.3 billion



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FY 2009 Higher Education Revenue Sources

Source Amount Note

State + local $ $88.7 billion Even with ARRA $ -- no change from FY 2008

Net tuition $44.5 billion Up ~ 7% from FY 2008

Total$133.3 billion


“Mounting State Debts Stoke Fears of a Looming Crisis”

New York Times December 5, 2010


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• Projected state budget gaps: • FY 2011: $121 billion• FY 2012: $102 billion

• Post-budget state budget cuts• FY 2008 - $13 billion (13 states)• FY 2009 - $43 billion (43 states)• FY 2010 - $39 billion (39 states)• FY 2011 - $14 billion (14 states)


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“Graduation Rates Fall at One-Third of 4-Year Colleges”

The Chronicle of Higher EducationDecember 6, 2010

Performance Funding – Why? The Degree Matters

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• The United States is falling behind other countries in educational attainment.

• America’s 18 - 24 year-olds are less well-educated than 25-64 year-olds.

• Graduation rates are low for 4-year institutions and have not improved over time (58 percent).


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• More than 75 percent of students who start at a community college fail to earn a certificate or degree within three years.

• U. S. adult learners drop out of college at an alarmingly high rate.

• Experts predict a serious shortage of workers with post-secondary degrees and credentials in the near future


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Arkansas Trustees Meeting 11 12/10/2010

Performance Funding 1.0: 1980 – 2004Performance Funding 2.0: 2005 – 2010


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Version 1.0 Version 2.0

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No national supportIndividual state

experimentationScattershot

evaluationNo national

clearinghouse

National support*State efforts are

better connected & focused

Stronger evaluationsInformation

accumulating

* From multiple Foundations, National Governor’s Association, and US Department of Education

Performance Funding 1.0 v. 2.0


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Performance Funding 1.0 – Many States Tried It

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FloridaOklahomaSouth CarolinaPennsylvaniaOhioArkansas

MissouriNew MexicoIllinoisWashingtonTennessee


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Performance Funding, 1.0Two examples

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Tennessee was the first – 1980-81 Piloted in 1974 2 % of the state $ in ‘80,

then increased to 5.45% Transparent, focused on

few metrics Embedded in the

subsidy allocations – not a “bolt-on” that could be cut when times are bad

Relatively simple, flexible

Sustained

South Carolina’s experiment – 1990s Very ambitious --

sought to have 100% of funding based on performance

Very complex – large number of indicators and processes

Threatening – some saw it as a way of shrinking or closing inefficient or ineffective campuses

Terminated


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Performance Funding 2.0

“We need to measure what matters. We need to know what the students learn, and what jobs they get. We need to know why students of some community colleges do better in the job market than others. Why minority students at some colleges take longer to earn a degree than similar students elsewhere. We don’t know the answers. We’re not even asking the questions.”

Bill Gates, 2009

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“Over a third of America’s college students and over half of our minority students don’t earn a degree, even after six years. So we don’t just need to open the doors of college to more Americans; we need to make sure they stick with it through graduation. That is critical. ”

President Obama, 2010

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The ABCs of Performance Funding – What Do State Policymakers Want?

Accountability:- More graduates in high demand fields- More focus on success of underserved

populationsBetter Performance:- Efficient and cost effective instructional delivery focused on completionsCollaboration:- Particularly among two and four year institutions

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The ABCs of Performance Funding – What Do State Policymakers Want?

More Cost-efficient

Student Success,

More Quickly

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Some examples:Louisiana (2010 Legislation)Tennessee (2010 Legislation)Indiana Washington Community Technical CollegesOhio

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Louisiana: State funding reductions, more anticipated. For 2010-11,

Adopted the GRAD Act that establishes graduation rate goals for public institutions

When institutions meet these goals they are granted more fiscal autonomy

Tied 25% of state funds to completion/ transfer and articulation/workforce/research, including graduates ages 25 and older, racial/ ethnic minorities, low income, STEM fields

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Tennessee: Complete College Tennessee Act of 2010 Comprehensive legislation

Outcomes-based funding model, including end of term enrollment, student retention, timely progress toward degree completion, etc.

Transfer/articulation – common course numbers

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In 2009-10, Indiana modified its funding to include–

Degrees (and for low-income students)Course completionsOn-time graduation, andTransfer

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Washington Community/Technical Colleges –The Board established a student success goalRecognized students in all mission areas (including

adult basic education and developmental education), reflect diverse communities served by colleges

Measures are simple, understandable, and relevant to institution, the student and policy makers

Informed by solid research at Columbia University’s Community College Research Center

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Washington’s four categories of measures:

1. Momentum points that build towards college-level skills

2. Momentum points that build to “Tipping Point” and beyond

3. Earning college level credits in math

4. Completions

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Performance Funding – Advantages

Institutions do respond to financial incentives

Lessons from Performance Funding 1.0FloridaWashingtonOhioTennessee

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Performance Funding 2.0 – Advantages

Opportunity to better align incentives with desired results for:

Institutions (state subsidy)Students (financial aid, tuition, instructional

delivery)Faculty (tenure/promotion/financial awards)Staff (promotion/financial awards)

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Performance Funding 2.0 -- Pitfalls

Can be difficult to design – need to involve technical expertise early

Can be difficult to account for differences in mission

Some data are hard to come byNeed to recognize funds needed to support

institutions’ core functionsCould it lead to grade inflation?

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I. Performance Funding in Ohio, V 1.0


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Ohio had a long history of performance-based funding

The first of the four “Challenges” began in the 1980s

Total funding for the Challenges equaled about 10% of total state operating subsidy for campuses by late 1990s

The past successful implementation of performance funding helped set the stage for significant changes in FY 2010 and FY 2011

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Performance funding foundations:Policy design

The Challenges Goal Recipient $ Distributed

Research Increase third-party sponsored research $

Public university main campuses; some private universities

~$10 - $12 million per year

Access Lower tuition to increase enrollments at access campuses

Public community colleges and selected 4-year access campuses

~ $65 million per year

Success

Decrease time to UG 4 –year degrees; improve degree achievement for at risk students

Public university main campuses

~$55 million per year

Jobs Increase job-related training

Mostly at public two-year campuses

~$10 million per year

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Performance funding foundations: Outcomes

The Challenges Goal Outcomes

Research Increase third-party sponsored research $

Persistent rise in $ volume of third-part sponsored research and state per-capita share of such research. (Source: NSF and related sources)

Access Lower tuition to increase enrollments at access campuses

High spike in enrollments at access campuses representing what is arguably a net increase in UG enrollments statewide(that is, the access campus enrollments did not come at the price of lowered university enrollments) .(Source: HEI data)

Success

Decrease time to UG 4 –year degrees; improve degree achievement for at risk students

Significant decreased time to degree for UG; slight increase in 6-year degree rates; increase in number of at-risk degree recipients. (Source :HEI data)

Jobs Increase job-related training

Built job training capacity at access institutions; served 5% of Ohio’s workforce annually; significant savings and cost reductions reported by participating businesses and industries. (Source: OBR staff surveys.)

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II. Funding Formula Changes in FY 2010 and FY 2011


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II. The Chancellor’s ten-year strategic plan: Some key elements

Strategic plan was mandated by the legislatureExplicit goals for the new public agenda:

Enroll and graduate more Ohioans. Increase state aid, improve efficiency, and lower

out of pocket expenses for undergraduates. Increase participation and success by first-

generation students. Increase participation and success by adult

students.Each goal has a specific metric by which

progress toward the plan is assessed annually.

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II. Changes in place for FY 2010 and FY 2011

Major shift to success-based formulasCreation of three new formulas:

University main campusesUniversity regional campusesCommunity colleges

Endorsed by the Governor and approved by the General Assembly in H.B. 1

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II. University main campuses

Shift from enrollment-based to course- and degree-completion based formula Cost-based course and degree allocations Empirically-based adjustment (extra weighting) for at-

risk students Degree-completion component to be phased in slowly

Setasides for doctoral and medical funding Doctoral and medical funding to become more dynamic

and performance-basedEffects phased in over time

99% stop loss in FY 2010 98% stop loss in FY 2011

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II. University regional campuses

Shift from enrollment-based to course-completion based formula Cost-based course and degree allocations Empirically-based adjustment (extra weighting) for at-risk

studentsPlan to add degree-completion component in 2 to

4 years Time to permit regional campuses to adjust their missions

to focus more on upper-level undergraduate enrollmentsEffects phased in over time


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II. Community colleges

Will continue to have cost-based enrollment formula as major basis of funding

Adding State of Washington’s concept of ‘Momentum Points” -- which Ohio calls “Success Points” -- beginning in FY 2011 Success Points share of total community college

funding is 5% in FY 2011, and will increase over timeEffects phased in over time


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Toward an integrated state policy in support of student success

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Goal of public policy

Major financial policy levers

Status in Ohio

Institutions State subsidyBeing implemented, & refined

StudentsStudent financial aid, tuition policy

Pilot projects done & evaluations underway

FacultyCompensation; tenure and promotion policy

Not planned


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What we know about successful programs

Common threads – staying power Commitment of political leaders, institutional leadership,

faculty, staff and students Mission sensitivity -- not every institution is expected to

have high performance in every area No funding cliffs -- effects phased in over time Transparency/accountability with periodic reports on results One size does not fit all: Each state approach has been

unique, with some sharing of components Improvement focus

Institutions should be able to influence the results over a reasonable timeframe

Institutions should be able to use the information to develop strategies for improving student achievement

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Performance and Completion:What can trustees do?

Know your campus numbersKnow your campus trend lineKnow how your campus compares to peers Know how your campus compares to top

performing peersKnow your campus & state contextSet specific goals for improvementUse the “C.A.S.E.” method to move the needle

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Performance and Completion:What can trustees do?

What is the “C.A.S.E.” method?CopyAndStealEverything

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Some sources

Books, articles, presentations by:

Access to Success (NASH)Brenda Albright (National consultant)

Joseph Burke (The Rockefeller Institute)Community College Research Center (Columbia University)

Complete College AmericaBill and Melinda Gates Foundation

The Lumina FoundationNational Center for Higher Education Management

[email protected](614) 598-9437

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mailto:[email protected]


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Thank You/Questions?

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Appendix: What are “success points?”

Measures of student success that are sensitive to the community college’s mission and students Derived from Columbia University Teacher’s College study One point for each, unweighted by student or program or level

Success Points include number of students who either:- Complete their first remedial course; - Successfully complete a developmental Math course last year, and

subsequently enroll in a college level Math; and - Successfully complete a developmental English course last year, and

subsequently enroll in a college level English. …and who

- Earn their first 15 semester credit hours- Earn their first 30 semester credit hours- Earn at least one associate degree, from that institution, in a given year.- Complete at least 15 semester credit hours at that institution and

subsequently enroll for the first time at a four year college or university, in Ohio.

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PRESENTATION TO THE HIGHER EDUCATION TRUSTEES MEETING STATE OF ARKANSAS PULASKI TECHNICAL COLLEGE...

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