tennessee higher education commission
Post on 05-Feb-2016
52 Views
Preview:
DESCRIPTION
TRANSCRIPT
1
Tennessee Higher Education Commission
Tennessee’s Outcomes-Based Funding Formula
AASCU – December 1, 2011
2
Tennessee Higher Education Commission
TN Finance Policy Overview
• For decades, TN operated an enrollment-based funding formula for higher education, with a 5% Performance Funding add-on.
• Recently, the policy focus has shifted from enrollment to productivity (educational attainment and workforce preparation).
• In response, states have altered Performance Funding programs or added productivity incentives to existing models.
3
Tennessee Higher Education Commission
TN Finance Policy Overview
• However, enrollment is still the basis of these models. The vast majority of funding is still distributed as a function of enrollment.
• There is a disconnect between the state policy focus (productivity) and the finance policy instrument (enrollment).
4
Tennessee Higher Education Commission
TN Finance Policy Overview
• TN completely threw out its enrollment model and started over, building from scratch an outcomes-based model that is unique in higher education policy.
• Key features: exclusive use of outcomes, in lieu of enrollments; institution specific weighting structure for the outcomes; end of entitlement approach to funding.
5
Tennessee Higher Education Commission
Tennessee Finance Policy Genesis
• In 2009, THEC proposed to former Governor Phil Bredesen a new incentive structure – an outcomes-based funding formula that would replace the enrollment based funding formula.
• Gov. Bredesen included THEC’s idea of an outcomes-based model in a proposal for higher education reforms that he made to the Legislature.
• In January 2010, Tennessee passed the “Complete College Tennessee Act” which called for the creation of an outcomes-based funding formula.
6
Tennessee Higher Education Commission
• This is not a reform to TN’s long-standing Performance Funding program.
• The outcomes-based model completely replaces the enrollment-based model.
• Enrollment, beginning or end of term, simply no longer factors into TN higher education state funding.
• The outcomes model is not for the allocation of any new state funding, but for all state funding.
TN Outcomes-Based Formula
7
Tennessee Higher Education Commission
TN Outcomes-Based Formula
OutcomeStudent Progression: 24 Credit HoursStudent Progression: 48 Credit HoursStudent Progression: 72 Credit Hours
Bachelors DegreesMasters Degrees
Doctoral/Law DegreesResearch/Grant Funding
Student TransfersDegrees per 100 FTE
Graduation Rate
Universities
8
Tennessee Higher Education Commission
TN Outcomes-Based Formula
OutcomeStudents Accumulating 12 hrsStudents Accumulating 24 hrsStudents Accumulating 36 hrs
Dual EnrollmentAssociatesCertificates
Job PlacementsRemedial & Developmental Success
Student TransfersWorkforce Training (Contact Hours)
Awards per 100 FTE
Community Colleges
9
Tennessee Higher Education Commission
TN Outcomes-Based Formula
• The outcomes-based model “weights” outcomes differently by institution.
• For instance, as graduate degrees and research have a larger role in institutional mission, they are weighted more heavily in the model.
• This weighting feature allowed the model to be designed specifically to an institution’s mission.
Tennessee Higher Education Commission
TN Outcomes-Based Formula
Bachelors degrees; little research/doctoral degrees
Extensive doctoral degrees and emphasis on research
Weights Based on Institutional Mission APSU UTM TTU UTC MTSU ETSU TSU UM UTKStudent Progression: 24 Credit Hours 3% 3% 3% 3% 3% 3% 3% 2% 2%Student Progression: 48 Credit Hours 5% 5% 5% 5% 5% 5% 5% 3% 3%Student Progression: 72 Credit Hours 7% 7% 7% 7% 7% 7% 7% 5% 5%
Bachelors Degrees 30% 30% 25% 25% 25% 25% 25% 25% 15%Masters Degrees 15% 15% 15% 15% 15% 15% 15% 15% 15%
Doctoral/Law Degrees 0% 0% 5% 5% 5% 7.5% 7.5% 10% 10%Research/Grant Funding 10% 10% 10% 10% 10% 12.5% 12.5% 12.5% 15%
Student Transfers 10% 10% 10% 10% 10% 5% 5% 5% 5%Degrees per 100 FTE 15% 15% 10% 10% 10% 10% 10% 10% 10%
Graduation Rate 5% 5% 10% 10% 10% 10% 10% 12.5% 20%100% 100% 100% 100% 100% 100% 100% 100% 100%
11
Tennessee Higher Education Commission
TN Outcomes-Based Formula
• All state funding is back up for grabs every year.
• No institution is entitled to some minimal level of appropriations that is based on prior-year funding.
• State appropriations have to be earned anew each year.
12
Tennessee Higher Education Commission
TN Outcomes-Based Formula
• THEC convened a Formula Review Committee to discuss and debate the new formula design.
• The committee included representatives from higher education and state government.
• The committee included people with vastly different views on higher education.
• Broad consensus on the philosophy and principles of new outcomes-based formula model.
13
Tennessee Higher Education Commission
TN Outcomes-Based Formula
• Institutions played a key role in the process.
• Selected campus presidents, CFOs and provosts were members of the Formula Review Committee.
• Presidents/chancellors were queried for their suggestions on what outcomes to include and the priority of the outcome.
14
Tennessee Higher Education Commission
TN Outcomes-Based Formula
• Multiple Formula Review Committee (FRC) meetings
• Explicit institutional feedback and input
• Regional town halls
• Staff background briefings with governing boards, Constitutional officers and legislative members
• Campus visits and consultations
15
Tennessee Higher Education Commission
Developing a New Formula Model
• THEC staff back-tested model designs by simulating the formula calculations for three prior years.
• This provided comfort that the new design was stable and that the new model’s behavior was properly understood.
• Once the outcomes model was finalized, THEC staff developed a projection tool, a Dynamic Formula Model, that allowed the user to simulate the effect of future changes in productivity.
16
Tennessee Higher Education Commission
Outcomes Based Model Advantages
• The outcomes model is linked directly to the educational attainment goals of TN’s Public Agenda.
• The outcomes model establishes a framework for government to have an ongoing policy discussion with higher education.
• The model is adjustable to account for new outcomes or a different policy focus (changing the weights).
17
Tennessee Higher Education Commission
Outcomes Based Model Advantages
• Emphasizes unique institutional mission.
• More transparent and simpler for state government.
• Does not penalize failure to achieve pre-determined goals.
18
Tennessee Higher Education Commission
Lessons Learned in Tennessee
• Go Big. Even a clever PF program at 5% is swamped by the other 95% that is based on enrollment.
• Smooth transition from old to new rules of the game.
• Proper engineering/Back testing.
• Transparency in intention and design.
• Institutions must help shape the finance policy (in TN’s case, the outcomes and the weights).
19
Tennessee Higher Education Commission
Lessons Learned in Tennessee
• Key philosophical and practical impediments to traditional Performance Funding paradigm:
• An institutional reluctance to put state funding at risk;
• Attempts at large-scale PF designs have been too volatile and complex (see South Carolina in the 1990s).
20
Tennessee Higher Education Commission
TN Outcomes Formula
• Extensive information, including the outcomes-based formula, are available on the THEC homepage.
• tn.gov/thec
21
Tennessee Higher Education Commission
Russ Deaton, Ph.D.Associate Executive Director for Fiscal Policy & Administration
Tennessee Higher Education Commission404 James Robertson Parkway, Suite 1900
Nashville, TN 37243-0830615-532-3860
Russ.Deaton@tn.gov
top related