Group to review changes to college funding formula

After decades of funding colleges based on how many students they enroll, Georgia will start work on a formula that emphasizes how students perform and how long it takes them to graduate.

Gov. Nathan Deal appointed a committee Thursday to recommend changes to the funding formula by Dec. 1, 2012. The group is expected to look at graduation rates, retention rates and other targets.

"The current funding formula is based on student enrollment but not student completion," Deal said in a statement. "It rewards institutions for increasing the number of students but does not consider whether or not institutions are successful in educating those students. I want to incentivize college completion."

With about 11 percent of the state budget spent on colleges, Deal said the state must make sure schools produce a highly educated workforce. But only 44 percent of students earn a four-year degree within six years, he said.

Other states have eliminated enrollment from funding formulas or downplayed its importance.

Tennessee colleges earn money by reaching targets in graduation rates, retention rates and other areas. Indiana is using about $120 million in incentives to encourage colleges to reduce the costs of each degree. South Carolina is working on a formula that considers graduation rates, roles in economic development and other factors.

Georgia's committee will review funding for the 35-college University System of Georgia and the 25-college Technical College System of Georgia. The 26-member group includes college presidents and students from both systems as well as lawmakers and business leaders.

Committee member and University System Chancellor Hank Huckaby said the group should consider the different missions colleges have.

Two-year colleges shouldn't be penalized if students attend for only a semester or year and then transfer elsewhere, he said. Some colleges enroll many working adults who attend part-time and take longer to graduate, he said.

"We know the state is investing in our colleges and we must show that we are making wise use of their investment," Huckaby said.

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