Georgia college funding to focus on graduation, not enrollment

If Georgia’s public colleges want more taxpayer money they’re going to have to earn it by helping more students get a degree.

A commission appointed by Gov. Nathan Deal approved a new formula Wednesday that links the state funding colleges receive to their improving student success and the number of degrees or certificates awarded. The plan, which won’t go into effect for a couple of years, represents a drastic shift from the current system that focuses on enrollment and how many credits students take, with little attention paid to whether they ever graduate.

The new formula is one of a series of steps Georgia is taking that acknowledges the state’s economic future depends on colleges producing a more skilled workforce to attract and keep employers.

The formula is “important to the future direction of our state,” Deal told the commission. “This actually is probably one of the most important final pieces in the puzzle.”

Other parts of his Complete College Georgia initiative create a privately funded needs-based scholarship. The governor also ordered all schools in the university and technical college systems to develop detailed plans on how they will help more students earn a degree.

Deal will officially receive the formula report before the end of the year, and the change does not require approval from the state Legislature.

The 2015 fiscal year allotment will provide a base funding moving forward, said Kristin Bernhard, Deal’s education policy adviser. Starting with the 2016 fiscal year, colleges would earn or lose money based on whether they improve.

So far, Tennessee is the only state where 100 percent of public college funding is tied to outcomes. Nearly a dozen states are working on plans to tie at least some portion, if not all, of college funding to performance goals.

Georgia’s new formula ties funding to how well students progress through college and the number of degrees awarded. While progression is rewarded, the formula focuses on “outcomes,” such as the number of certificates awarded by technical colleges and the number bachelor’s, master’s and doctoral degrees awarded by research universities such as the University of Georgia and Georgia Tech.

Colleges can receive extra money if they succeed with students who are known to struggle the most in school. This incentive money is tied to adult learners, who are 25 or older, and low-income students, as measured by those who receive the federal Pell Grant.

Schools may also be rewarded for how well they meet certain initiatives that help Georgia’s workforce needs. Specifics are still being determined, but the technical colleges may want to consider work placement, while universities may focus on the number of science, math, technology and engineering graduates, Bernhard said.

The formula will determine how much money the state allocates to the two systems. The systems will still decide how to divvy up that lump sum among their colleges.

Georgia spends about 11 percent of its state budget on public colleges, but only 44 percent of students attending a public four-year college graduate in six years. Projections show that by 2020 about 60 percent of jobs will require education after high school, although only 42 percent of Georgians meet that standard.

“Overall this is an excellent framework that will serve us well in the years ahead,” said Hank Huckaby, chancellor of the University System of Georgia and a member of the funding committee.

Skeptics worry that attaching performance requirements to funding for colleges will harm quality, with faculty pressured to weaken the standards to increase success.

Bernhard assured the committee that the state is “not looking at turning any institution into a degree mill.”

Tennessee, which is in the second year of its new funding strategy, included safeguards to address this concern by connecting 5 percent of the money to licensure exam passing rates and other outside factors that measure quality.

Experts say leaders can also monitor passing rates on standardized exams such as the GRE and review average course marks to see if a sudden change was caused by grade inflation, she said.

Bernhard said Georgia’s monitoring will be done partly by third-party accreditation agencies and by the chancellor and commissioner of each system.

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