Op-Ed: Connecticut should try performance-based funding for colleges

Two weeks ago, statewide newspapers reported the governor’s proposed budget for public post-secondary education is nearly $50 to $80 million less than needed to support the operations at the University of Connecticut System and the Connecticut State College and University System.

As anticipated, education leaders have responded with the usual expressions of gloom and doom; suggesting terminating academic programs, raising tuition and fees, reducing student services, outsourcing services such as maintenance, reducing financial aid, and advocating recruiting more nonresident and international students who pay more in tuition.

Op-ed submit bugIt is not entirely clear the exact impact the budget reduction will have on the state’s two public postsecondary systems. It would be wise for the Senate Education Committee to request in writing, within the next 30 days, specific plans from both systems. Although this exercise is painful, it is a necessary process to ensure the educational mission is protected.

There is truth that a budget reduction of this magnitude will have serious consequences, but, it will not create financial exigency. Managing the budget reduction will be difficult but not impossible. The matter of funding higher education is not going away as many of the independent economic analysts project a long term budget crisis for Connecticut.

Historically the Connecticut model of funding higher education has been based upon enrollment. In the past, budget reductions were often managed with the campus philosophy to increase revenue by raising tuition and/or increasing student enrollment. The solution is not enrollment growth as a means to generate revenue.

The National Center for Educational Statistics (NCES) anticipates a steady decline in Connecticut high school graduates leading up to 2021-22. The data projects public high school graduates at 33,110 for 2021-22 well short of its peak of 38,450 in 2010-11. The impact of fewer high school graduates will be felt the greatest at the regional universities.

In all probability, the current and future financial conditions will not allow the Connecticut legislature to support public higher education at pre-recession levels. The National Conference of State Legislators (NCSL) reports that many states are reconsidering the enrollment-based funding models and considering models that are more aligned with performance-based funding that rewards colleges and universities for improved student progression and graduation rates.

NCLS indicates 30 states have put in place a performance-based funding model that allocates some amount of funding based upon performance indicators such as course completion, time to degree, transfer rates, and the number of low income and underrepresented student graduates. An additional four states, Colorado, Georgia, Iowa and South Dakota are transitioning to some form of performance-based funding.

Performance-based funding dates back more than 30 years with advocates often pointing to the advantages that include providing a stable/predictable source of funding, maintaining affordability and access with stable tuition, acknowledgement of a state/student cost- sharing partnership, and performance funding models that reduce the political considerations from funding decisions.

The supporters also point to performance-based funding as a means to affect institutional behavior so as to reward innovation and improvement in productivity. There is among higher education experts a strong belief that too many colleges and universities are enrolling underprepared students to generate tuition revenue without regard to the student’s chance of success. Performance-based funding could reduce the pressure to grow enrollment as a means to increase revenue and focus more on student retention to improve execution.

Performance-based funding has added value to the two Connecticut public systems. First, it acknowledges role, scope, and mission differentiation among the flagship, regional universities and community colleges with appropriate funding to achieve the mission. Second, and more important, performance-based funding assigns an academic cost factor for the type and level of academic programs that acknowledges high cost programs like nursing, teacher education, engineering, dentistry, and medicine and assigns a higher indexed cost factor formula per student credit hour. In theory, the academic cost factor will normalize state funding for similar academic programs regardless of the type of institution or system.

In my view the methodology that funds higher education based upon enrollment requires a recalibration. Yes, the state should provide the core funding to ensure adequate resources to support the academic enterprise. On the other hand, the recipients of the state funds have an obligation to graduate students of all abilities in a timely manner.

Legislators and higher education leaders should also mandate new policies that reduce time to degree and reduce student debt. For example:

  1. Legislative action could mandate that all associate and baccalaureate degree programs be offered at 60 or 120 academic credits respectively except in cases in which accreditation requires additional credits. A policy to eliminate excess credit hours could reduce the time to degree for many students as well as reduce the cost to earn a degree.
  1. More active efforts should be made to reduce the cost of textbooks. Open source materials are readily available from publishers that can supplement faculty instruction.
  2. A state-wide higher education policy should be implemented among the two systems to consistently award college level credit for Advanced Placement, International Baccalaureate, Dual and Concurrent enrollment courses for high school students thereby reducing time for an associate and/or baccalaureate degree.
  3. Legislative action should mandate policy among the community colleges and four-year universities to establish reverse transfer degree credit programs to boost graduation rates and increase Connecticut citizenry with an academic credential.
  4. Legislative mandate should require the periodic review of low enrollment and low completer academic programs every three years. The productivity policy should determine a standard for continuation or termination. The productivity policy might require a three-year average for associate and baccalaureate degree programs of 24 graduates or eight per year; post-baccalaureate and masters of five graduates per year or 15 over a three-year period; and Professional and Doctoral of two graduates per year or six over a three-year period.
  5. Greater efforts need to be made among the two public postsecondary systems to create a more effective and efficient library consortium to reduce cost and to increase access to knowledge.

It would behoove the education community to view the state budget crisis with its mind wide open to the possibilities. The old model of enrollment-based funding has run its course. Is performance based funding good for Connecticut? We will not know until the concept is fully explored.

Michael Gargano, Jr. Ed.D., is the former provost and senior vice president for academic and student affairs for the Connecticut State College and University System; vice president for academic, faculty, and student affairs and dean ad interim School of Health Professions for the University of Texas Health Science Center San Antonio; and vice president for student and academic support services for the Louisiana State University System.

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