Outcomes-Based Higher Ed Funding Plans Move Forward

Last legislative session, efforts to alter the state's funding model for public higher education by tying a portion of it to student success rather than student enrollment stalled. But House Bill 9, authored by state Rep. Dan Branch, R-Dallas, did pass, and it required that new plans for outcomes-based funding be submitted for consideration in the upcoming session.

Advisory committees made up of college and university administrators have been collaborating on an outcomes-based funding system that can generate enough support to get through the legislative process in 2013. Today, those advisory committees are presenting their plans to the Texas Higher Education Coordinating Board's strategic planning and policy committee.

For universities, up to 10 percent of the funds that would have been used to fund enrollment would be used for outcomes-based funding — more than $200 million. Importantly, the outcomes the advisory committee suggested to use do not include graduation rates, a measurement that many administrators question. The proposed system is only initially expected to impact any individual schools' funding by up to 2 percent, but officials hope that will be enough to spur behavior changes.

The proposed metrics for universities, as described by the coordinating board:

  • Total undergraduate degrees: Total number of bachelor’s degrees awarded by an institution in a given year.
  • Time-to-degree factor: Total bachelor’s degrees multiplied by the school’s six-year graduation rate, to encourage timely completion.
  • Institutional mission factor: Degrees divided by full-time student equivalents (FTSEs) and multiplied by 100. This aggregate measure adjusts for part-time and transfer students, providing a common framework for comparing degree productivity among institutions with different missions and student bodies.
  • Cost-to-degree factor: Degrees weighted using cost-based weights to compensate for the varying costs associated with differing degree types.
  • Critical fields factor: Degrees awarded in fields identified as critical workforce needs, such as computer science, engineering, math, physics, nursing, allied health and teaching certificates for math and science. 
  • At-risk factor: Degrees awarded to students who meet the federal criteria for being at high risk for non-completion.  Indicators are being a federal Pell Grant recipient, part-time student, GED recipient or entering higher education at age 20 or older. 
  • Persistence factor: Points awarded for students who complete their 30th, 60th or 90th hour at the institution, to encourage the use of effective persistence policies.

Community colleges will use a "momentum points" system, under which institutions will be rewarded when students reach key moments in their educational journey.

Achievements for which the colleges will be rewarded, as described by the coordinating board:

  • Developmental education: Points awarded for completion of development education in math, reading and writing.
  • Gateway courses: Points awarded for completion of a first college-level math and college-level English course.
  • College credit hour attainment: Points awarded when student completes their first 15 college credits; first 30 college credits; and for completion of the core curriculum.
  • Credentials awarded: Points earned for students completing an associate degree, certificate or apprenticeship.  Also bachelor’s degrees to those community colleges offering a bachelor’s degree.
  • Transfers to a four-year institution: Points awarded for students transferring to a general academic institution after completing 15 hours of coursework.

If the committee approves the proposals today, the full board will consider them at a meeting in April. After it has adopted the proposed systems, Texas Higher Education Commissioner Raymund Paredes will submit the plans to the governor, legislators and the Legislative Budget Board in June.

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