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StrategyLabs.LuminaFoundation.org
Outcomes-Based Funding & the
Student Completion Agenda
Presented by:Jimmy Clarke, Ph.D.
& Martha Snyder
HCM Strategists, LLCDecember 7, 2015
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StrategyLabs.LuminaFoundation.org 2
Supported by Lumina Foundation
Open platform for leaders and influencers in all 50 states to share research and data, encourage peer learning and professional experiences to advance Goal 2025.
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StrategyLabs.LuminaFoundation.org
State Policy Agenda
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Create Smarter Pathways
Improve Student Outcomes
Align Investments
• Attainment and Equity Goals
• Strategic Plans• Data systems
• “Affordability”• Need-based financial
aid & design• Outcomes-based
funding
• Transfer policies• Accelerated programs• K-12 CCR alignment• Returning Adults
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Objectives
• Introduce non-partisan research to a broad group of state stakeholders
• Improve awareness of data, the needs of the state, and policy options; and
• Build understanding to inform adoption, enhancement and sustainability of public policies that can help improve student outcomes.
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Support and Resources Provided• Non-partisan, evidence-based policy expertise
– Writing, webinars, on-site support– Speakers and discussants at meetings
• Convening and Facilitation– Peer learning engagements in states to share lessons, challenges– Multi-state discussions to explore ideas with researchers and experts– Meeting preparation and facilitation (board meetings, workshops)
• Advising Policymakers– Non-partisan testimony– Individualized briefings
• Research– Original data collection and analysis– Written analysis of policy alternatives and alignment to research-
informed best practices– Translational research
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ALIGNING INVESTMENTS TO SUPPORT STUDENT COMPLETION: OUTCOMES-BASED FUNDING
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Policy Rationale for Performance Funding
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Align funding method with state/system prioritiesCompletion/Attainment
Jobs/Economic Development
Align institution priorities Support Scaling of Proven Student Success
Practices
Programmatic Evaluation and Change
Improve Efficiency & Reward Outcomes
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State Funding Models
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• Allocation based on prior levels of funding• Adjusted +/- based on available funds• Goal: Institutional fiscal stability• Challenge: Equity in institutional funding
Historic
• # of students enrolled at census date• Recent shift to course completion• Goal: expand access• Challenge: Incentive on prolonged persistence/retention
Enrollment
• Reward for reaching performance milestones or goals• Completion not necessarily key objective• Often ‘bonus’ (new allocation) or small % of general allocation• Challenge: Sustainability and funding
Early Performance
• Funding based on student success and completion• Significant portion of general allocation to institutions (not
reliant on new money-only/separate allocation)• Challenge: College’s ability to respond
Outcome-Based
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Outcomes-Based vs. Performance-Based Funding: What’s the Difference
• Performance Funding: Broad set of policies linking allocation of resources to accomplishment of certain desired goals. Historically:– Often add-ons or bonuses to institution core state funding or small amounts of
reallocated dollars;– Metrics: broad, contradicting, not tied to state’s completion or attainment goals
(e.g., increased access, diversity in faculty higher expenditures on research)– Design: One-size fits all, vague measures, target-oriented
• Outcomes-Based Funding: Evolved form of performance-based funding– More explicit connection to state needs
• Focus on student progress and completion• Closing gaps in student outcomes (at-risk students prioritized)• More money at stake; part of core allocation to institutions
– Refined development & modeling approaches: all institutions included with differentiation to reflect mission
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Arkansas Goals & Finance Policies
Goals & Priorities• Support 2025 Goal of 60%
attainment– Increase number of postsecondary
credentials by 50%– Increase enrollment of adult
students– Raise attainment rate of
underserved students– Affordability/reduce time to degree
• Strategies– Course redesign (remedial &
gateway)– Guided pathways– Student service innovations
Current Funding Model• Primarily enrollment + cost based• Performance component based on
predetermined targets (punitive)• Disconnected from broader
attainment and completion priorities– Does not promote wide-scale
adoption of identified strategies– Limited focus on priority
populations (adult and underserved)
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Design Principles for Outcomes-Based Funding
Begin with a state goal/clear policy priorities
Use a simple approach
All public institutions
included, reflect mission
Incent success of typically
underrepresented students
Make the money
meaningful
Seek Stakeholder
Input
Phase-in (≠ Hold
Harmless)
Include only measurable
metrics
Plan to evaluate
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Common Measures
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Type of Measures ExamplesStudent Progression and Momentum Intermediate outcomes/key milestones important to student’s progression toward completion
• Remedial education success• Completion of first college-level mathematics
and English courses• Credit accumulation (e.g. 15, 30 credit hours)
Completion & OutcomesPromote certificate, degree completion, transfer
• Number or rate of program completers• Number of transfers• Job Placement
Productivity & Institution MissionPromote efficiency, affordability and focusing dollars on core mission functions
• Degrees per 100 FTE• Research• Workforce Training
Priority Student categories and/or degree types that are a priority for the state to meet attainment and job needs. Student focus is on progression and completion, not just access.
• Adult students• Academically underprepared students• Low-income (Pell-eligible) students• Minority students• STEM-H degreesNote: often reflected by providing an extra weight to progression and completion metrics
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FY 2015: Implementation of Performance/Outcomes-Based Funding Models
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Outcomes/Performance-Based Funding as % of Institution Funding Support
* ND and WY formulas are based on course-completions only; no other measures such as degree completions, are used. Nevada’s formula is about 96 percent course completion, with approximately 3.8 percent distributed on degree completion and student progression measures.
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Outcomes-Based Funding: Research & Impacts• Focused mostly on early performance funding
policies; beginning to track effect of more robust outcomes-based funding policies
• Research is almost entirely focused on intermediate (institutional change) impacts
• Limited information/ability to understand ultimate impact (scarce research)
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Research and Impacts
⁺ Change in colleges’ awareness of state priorities & own performance
⁺ Reported increase in use of data in institutional planning• identify student barriers• align institution policies/investments
⁺ Academic program improvements• Academic departments: staffing and structure changes• Academic delivery: program structure (remedial education)
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Research and Impacts
⁺ Student Services• Registration, graduation procedures, financial aid• First-year retention programs• Targeted student advising, tutoring and supplemental services• Job placement services
⁻ Concern over⁻ Quality⁻ Instability of funding ⁻ Uneven knowledge of performance funding across and within colleges
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Considerations for Boards of Trustees in Outcomes-Based Funding Environment
• Focus on the Data– Student enrollment– Student progression – Student Completion– Disaggregated
• Support a culture of completion and success– Engage leadership on priorities– Evaluate all aspects of institutional operations– Help communicate support and engage all campus
stakeholders in conversation
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StrategyLabs.LuminaFoundation.org
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