Dive Brief:
- Missouri's Coordinating Board for Higher Education this week unanimously approved a measure to tie 10% of state funding to school performance, the St. Louis Post-Dispatch reports. Board members hope the move will serve as a good faith demonstration to elected officials they're being "good stewards" of state money while also improving the quality of higher education in the state.
- Gov. Eric Greitens is a fan of performance-based funding models; but in the past, only new money was subject to any performance standards. A December audit found nearly 900 degree programs, or half of programs state-wide, miss the mark on state productivity standards, which higher ed officials say is more an indication the industry — and student behavior — are changing.
- The board intends to put any money a school loses for not hitting performance marks toward targeted efforts at helping the school improve in the respective area.
Dive Insight:
Performance-based funding models are increasingly popular in states looking to balance budgets, often seeing what they consider to be a largely ineffective higher education paradigm as an easy first place to cut. And in some ways, the ideas behind performance-based funding make good common sense: In almost any other scenario, if the job doesn't get done, money doesn't change hands. In this case, the job many legislators and other public officials feel isn't being done is graduating students with marketable skills so they can then go and put that money back into the local economy. Jessie Ryan, executive vice president for the campaign for college opportunity, said during a recent meeting that "For every new $1 investment in higher education, the state will yield a $4 return on investment," but that return isn't being realized if graduation rates are low.
However, the problem with performance-based funding in execution is it fails to recognize that funding formulas have been historically uneven, disproportionately lower at the institutions which tend to serve the students who most need public support. Historically black colleges and universities and Hispanic-serving institutions take in a disproportionate number of lower-income students who require higher levels of remediation thanks to their attendance in K-12 schools which are underfunded, offer fewer advanced courses and have fewer opportunities for students to learn in labs and other enriching environments. When controlled for the same populations at majority institutions, research shows these institutions actually do a better job of graduating these students, who will soon make up a majority of all college-aged students in this country, than other institutions.
Taking more funding away from these institutions and the other smaller regional public institutions in states which serve similar populations, when they're already at a historic deficit and already serving students who need more, not less help and resources is counterproductive.
However, the Missouri plan to put withheld funds back into a pool to help strengthen targeted areas is a great proposal which should help move the needle, provided it is formalized into an plan to which state officials can be held accountable, rather than allowed to float as a "hope." If funds are directly put into a pool to hire more academic advisors or tutors and support staff, for instance, that money goes directly to helping students succeed, which addresses state lawmakers' concerns there is too much administrative bloat in higher ed and the institutions don't need more money. But history has shown with many state lottery and casino proposals which promised to allocate money to K-12 systems that those schools never saw, that these plans have to be clearly defined and codified to ensure the best intentions of board members are carried out, rather than allowing the withheld funding to be redirected outside of higher education.