Accountability and Performance Funding in Higher Education

Many states are instituting performance metrics for the public colleges and universities that they support.  It is interesting that accountability is becoming such a focus when support from states to its public institutions is declining.  At the University of Minnesota state support, as a percentage of total revenue, has shrunk from 29% in FY2009 to 18% in FY2012 according to the University’s annual financial reports.   It is also interesting to note where state dollars are going as the share to higher education decreases.  In an article from Inside Higher Ed that cites data by the National Association of State Business Officers (NASBO), it notes that support per student is decreasing faster than it is for Medicaid beneficiaries and prisoners.

Some of the states looking at performance metrics for higher education include Virginia, Tennessee, and Illinois.  Common metrics across states include retention and graduation rates, STEM degrees, average time and credits to degree, research with regional relevance and job placement.  In Louisiana, a bill has passed their senate education committee that would recommend that state funding for higher education be determined by college performance. In Tennessee, an outcomes based formula now accounts for 100% of the state’s higher education funding.

I worry about one size fits all metrics as the demographics of students seeking their first post-secondary degree are increasingly older than 25 and part-time. Below is a table that shows the significant increases in enrollment in every category but the youngest.

	Total fall enrollment in degree-granting institutions, by attendance status, sex, and age: Selected years, 1970 through 2020
[In thousands]
						Projected
	1970	1980	1990	2000	2010	2015	2020
All students	8,581	12,097	13,819	15,312	21,016	22,612	24,075
14 to 17 years old	263	257	153	131	211	211	237
18 and 19 years old	2,579	2,852	2,777	3,258	4,119	4,282	4,648
20 and 21 years old	1,885	2,395	2,593	3,005	4,052	4,278	4,399
22 to 24 years old	1,469	1,947	2,202	2,600	3,674	4,083	4,083
25 to 29 years old	1,091	1,843	2,083	2,044	3,196	3,510	3,770
30 to 34 years old	527	1,227	1,384	1,333	1,823	2,083	2,296
35 years old and over	767	1,577	2,627	2,942	3,941	4,165	4,643

Source: National Center for Education Statistics

In addition to the changing demographics there are concerns about higher education being driven by workforce and economic factors, rather than for pure academic reasons.  I have heard this view expressed by many faculty in non-STEM fields.

Accountability measures and performance based funding are part of the current higher education bill in the State of Minnesota.  The next few weeks will determine if language to tie 5% of state funding to the University achieving 3 of 5 performance goals set by the legislature will make it into the final version.  I hope this language is revised because as currently written it is hard to implement, given the one year time frame for a four year endeavor.  It would be better for the University and the state legislature to work together on drafting performance measures that are aspirational goals that serve students, the University and the state.