Proposal would tie funding for Georgia colleges to success, not enrollment

Georgia is writing a plan that would drastically change the way it funds public colleges, tying the money to student success and graduation rates, not enrollment.

Starting with the 2015 fiscal year the amount of money colleges receive would be determined mainly by how well students progress through college and the number of degrees awarded. Many details still need to be finalized, but a group appointed by Gov. Nathan Deal signed off on a draft framework Monday.

The state is emphasizing graduation rates because projections show about 60 percent of all jobs by 2020 will require education after high school. Only 42 percent of Georgia’s adults currently possess a college degree or certificate.

The work by the Higher Education Funding Commission represents a dramatic shift from the current formula, which is driven by enrollment and how many credits students take. Any new formula would not change the powers of the University System of Georgia and the Technical College System of Georgia to set tuition and fees.

By adopting such a plan, Georgia would join a growing number of states that connect funding to learning outcomes such as student progression, retention and graduation. Indiana, Ohio, South Carolina and Tennessee are doing this to varying degrees.

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Experts agree there is no one best formula to accomplish this.

States have tried outcomes-based funding for decades, but those plans failed because the amount of incentive money was small and it didn’t lead to improved graduation rates. It’s only in the past couple of years that states are tying more money to graduation, progression and retention. The argument is states must use a sizable pool of money to get the desired results. For example, Ohio plans to tie 30 percent of its state money for colleges to outcomes by 2015.

Georgia’s commission has until the end of the year to present its recommendation to Deal. The group, which includes lawmakers, college leaders and students, is part of a series of efforts Deal started last year to produce a more educated workforce.

The new funding formula would give colleges an incentive to work toward that goal, said Kristin Bernhard, Deal’s education policy adviser. Colleges would earn — or lose — money based on how well they help students earn a degree, she said.

All Georgia colleges would be expected to improve, but the working formula acknowledges that the schools have different missions. For example, outcomes for technical colleges and two-year colleges would include the number of certificates students earn and the number of students who transfer to other schools. For research universities, such as the University of Georgia and Georgia Tech, the formula would include bachelor’s, master’s and doctoral degrees awarded.

Knowing some groups of students historically struggle the most, the proposal pledges incentives if colleges help them succeed. This money is tied to low-income students, as measured by those who receive the federal Pell Grant, and adult learners, students 25 or older. Other groups, such as first-generation college students, may be added later.

Colleges would also be rewarded for how well they meet certain “strategic initiatives,” which are still being determined. One idea would consider work placement for technical colleges and how many science, math, technology and engineering graduates some universities produce.

Sen. Buddy Carter, R-Pooler, chairman of the Senate’s Higher Education Committee, asked what safeguards will prevent colleges from becoming “diploma mills.”

Similar concerns are being raised in Tennessee, which overhauled its funding formula in 2010 so that enrollment no longer plays a role. Colleges must reach benchmarks in graduation, retention rates and others areas, and there have been reports of professors feeling pressured.

Bernhard said there will be continual monitoring. She also said the Technical College System already promises to retrain its graduates if employers say they lack standard skills.

University System Chancellor Hank Huckaby said quality will be maintained.

“We are committed to stay on top of this as much as possible,” he said. “We do not want to lessen rigor.”

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