Postsecondary Performance
Funding Plans
Cheyenne, Wyoming
February 20, 2014
Matt Gianneschi, Ph.D.
Vice President of Policy and Programs
Education Commission of the States
1
Patterns of U.S. High School and College
Participation and Completion by Age
100%
High School Participation
Earn High School Diploma or Equivalent – Levels off at Age 21
80%
60%
Undergraduate College Participation –
Peaks at Age 19, Levels off at Age 30
40%
Complete Undergraduate College Degree –
Peaks and Levels off at Age 31
20%
0%
16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40
Note: Includes associate and bachelor’s degrees, but not certificates.
AGE
Source: U.S. Census Bureau, 2005-07 American Community Survey (Public Use Microdata Sample); prepared by the National Center for Higher Education Management Systems
2
-2
0.5
1.3
1.1
4
2
3.6
3.5
3.4
3.2
3.1
3.0
3.0
2.8
2.8
2.5
2.5
2.4
2.4
2.2
2.0
1.7
6.6
6.4
6.2
6.2
6.1
6.1
6.1
5.8
5.7
5.6
5.4
5.4
5.3
5.3
5.1
5.1
5.0
4.8
4.7
4.7
4.6
4.6
4.5
4.4
4.3
6
7.9
7.5
7.5
7.2
7.1
8
Nevada
Alaska
Louisiana
Arkansas
Texas
Arizona
Tennessee
New Mexico
Georgia
Kentucky
Idaho
West Virginia
Mississippi
Oklahoma
Alabama
California
Delaware
South Carolina
Florida
Maine
Oregon
Michigan
North Carolina
Ohio
Montana
United States
Indiana
Wyoming
Missouri
Wisconsin
Washington
Maryland
Hawaii
Pennsylvania
Illinois
Colorado
Utah
Vermont
Kansas
Nebraska
Virginia
Rhode Island
New Jersey
South Dakota
Iowa
Connecticut
New York
Minnesota
New Hampshire
Massachusetts
-0.6
North Dakota
9.0
Additional Average Annual Degree Production
Needed to Achieve Lumina’s Goal (60%)
10
0
Data File Provided by Patrick Kelly (NCHEMS, 2010)
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Iowa
New York
Virginia
South Dakota
Maine
West Virginia
Pennsylvania
Kentucky
North Dakota
Missouri
Vermont
Massachusetts
Illinois
Arkansas
Indiana
New Jersey
Minnesota
Maryland
Montana
Kansas
Ohio
Louisiana
United States
California
Mississippi
Nevada
Oklahoma
Utah
Oregon
South Carolina
Idaho
Texas
Florida
Arizona
Rhode Island
North Carolina
Tennessee
New Hampshire
Alabama
Wisconsin
Washington
Nebraska
Connecticut
Michigan
Hawaii
Alaska
Wyoming
Colorado
New Mexico
Georgia
Delaware
5
4
3
2.7
6
1
0.5
7
7.2
7.1
7.0
6.8
6.7
6.6
6.6
6.6
6.2
6.0
6.0
6.0
5.7
5.7
5.6
5.6
5.5
5.4
5.2
5.1
5.1
5.1
5.0
5.0
4.8
4.8
4.7
4.6
4.6
4.5
4.5
4.5
4.5
4.5
4.4
4.4
4.3
4.2
4.0
3.8
3.6
3.4
3.3
3.2
3.2
3.2
3.1
8
7.7
9.1
Change in College Attainment from 2000 to 2011 by State –
25- to 34-year-olds
10
9
2
0
Sources: U.S. Census Bureau, Decennial Census and American Community Survey; prepared by the National Center for Higher Education Management Systems (2013)
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Examples of State-level Performance
Funding Plans
•
Tennessee
•
•
•
•
•
Oregon
•
•
•
•
•
Complete College Tennessee Act of 2010
100% Outcomes-based funding for HIED
Performance is built into initial allocation formula
Formula is weighted according to pre-determined outcomes priorities
Creation of the Oregon Education Investment Board
Alignment of all systems to accomplish the state’s 40/40/20 goal.
Funding to institutions is allocated through performance “compacts”
Each board—K-12 districts, community colleges, and universities—negotiates a compact with the
OEIB.
Colorado
•
•
•
Performance contracts for each separate governing board, based on role and mission
Performance is self-referencing (institutions “compete” against their own current productivity)
The state identified priority goals—completion, student support, underserved populations, and
fiscal prudence—and the campuses selected their own metrics aligned with the state goals.
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Suggestions for Measuring and
Suggestions for Developing Effective Performance Metrics
Monitoring Performance
1. Focus on Annual, Achievable, Incremental Change Rather than Benchmarks
2. Measure Change Within Institutions (rather than performance against others)
3. To the Extent Possible, Focus on Activities Institutions Can Influence
4. Maintain Short List of High Priority Goals
5. Ensure That Metrics Are Not in Conflict With One Another
6. Use Existing Data Whenever Practicable
7. Consider “Smoothing” the Effect of Year-over-year Changes (i.e., 3-year averaging)
6
Options for Performance Metrics That Are Sensitive to
Campus Differences
•
Productivity (degrees/FTE enrollment)
– Instead of “graduation rates”
•
Credit Hour/Threshold Completion (15/30/60)
– Instead of retention
•
Gateway Course Completion (English, math, history, biology, etc.)
– Instead of passing remedial courses
•
Expenditures (by institution) or Costs (to students) per Degree
– Rather than tuition rates
•
Consider Alternative Measures of Completion, Such as Successful “Transfer-out” and
Dual Enrollment Course Completions.
•
Credit Hours at Completion
– Rather than “time” to degree.
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Tennessee Metrics (2014-15)
8
ExampleofofProductivity
Productivity Metric
Example
Option
Statewide
Degrees
FTE
Degrees per
100 Students
*Excludes
Private IHEs
2009
2010
2011
30,557
32,913
35,431
133,729.40
147,416.60
154,560.00
22.85
22.33
22.92
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Does it
it Work?
Does
Work?
• Evidence of programmatic efficacy is just now emerging, but consider:
– Kentucky (fastest growth in degree attainment in SREB)
– Tennessee – dramatic innovations in remedial education and course redesign
– Colorado – Overhaul of financial aid policy to align with state priorities
• Probably not useful to look at historical trends, as the conditions were very
different.
• Consider the “criticality” and magnitude of performance funding.
• Theory of the Firm (foundation of micoeconomics)
– Firms employ factors of production (producers)
– Operate in markets (and markets are dynamic)
– Firms are assumed to make consistent decisions relative to the market and
internal operations
– Are profit maximizers (always seek to maximize marginal utility)
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Theories That Help Explain Higher
Theories that Help Explain Higher Education
Education
• Revenue Theory of Expenditures
– Howard Bowen (1980)
– Colleges are “prestige maximizers” and will find infinite
uses of revenue
– Expenditures are determined by revenues, not markets
• Resource Dependency Theory (J. Pfeffer)
– Organizations are dependent on certain sources of
revenues.
– These “buyers” influence decisions made within
organizations, including structure and products.
– “He who pays the piper calls the tune”
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For More Information
ECS Postsecondary and Workforce Development Institute:
Dr. Matt Gianneschi: [email protected]
Education Commission of the States
700 Broadway, Suite 810
Denver, Colorado 80203
(303) 299-3624
www.ecs.org
[email protected]
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