This document summarizes trends in American higher education funding and performance-based funding models. It discusses how state funding for higher education has shifted from appropriations to tuition as the primary revenue source. It also describes trends toward performance-based funding models, where states allocate funding based on metrics like course completion, graduation rates, and employment outcomes. The document discusses implications of these models, like pressures to prioritize programs that perform well metrics, which can impact underserved student populations. It provides an example of how Cleveland State University addressed these challenges through curricular reforms to improve their graduation rates under Ohio's performance funding system.

1. AMERICAN HIGHER
EDUCATION TRENDS
AMERICAN COUNCIL OF EDUCATION FELLOWS, MAY 2016
Dr. Joanne Goodell, Dr. Rosalee Rush, Dr. Janelle Chiasera

2. AMERICAN HIGHER EDUCATION TRENDS
• Performance Based Funding, Dr. Joanne Goodell
• Institutional Equity, Dr. Janelle Chiasera
• Emergency Communications, Dr. Rosalee Rush

3. PERFORMANCE FUNDING AND ITS IMPLICATIONS FOR
EQUITY IN US HIGHER EDUCATION
Joanne E Goodell, PhD
ACE Fellow, 2015-2016
Home Institution: Cleveland State University
Host Institution: Kent State University
Presentation to the National Centre for Student Equity in Higher Education
Curtin University
May 26, 2016

4. TRENDS IN FUNDING SOURCES
Revenue Source Doctoral Master's Bachelor's Two-Year
Net Tuition Revenue
2002-03 26% 35% 35% 24%
2007-08 30% 40% 38% 25%
2012-13 40% 53% 49% 35%
State and Local
Appropriations
2002-03 40% 52% 49% 60%
2007-08 37% 47% 47% 60%
2012-13 26% 35% 37% 51%
Federal
Appropriations and
Local, State and
Federal Grants and
Contracts
2002-03 34% 13% 16% 16%
2007-08 33% 13% 15% 15%
2012-13 34% 12% 14% 14%
Source: The College Board. Trends in College Pricing, 2015.

5. STATE FUNDING MODELS
• Base plus/minus
• Formula
• Performance-based
• Old models based on inputs
such as number of students,
instructional costs, plant
maintenance, capital
improvements
• PF metrics include course
completion (ABC, no DFW),
graduation, retention and
employment rates
Model Tenn-
essee
Ohio Indiana
*PF 1.0 1979-
2000
1995 2007
*PF 2.0 2010 2009 2009
• PF 1.0 provided bonus on top of
regular funding
• PF 2.0 is part of the base, Tennessee
up to 85% PF
• By June 2014, 26 states have some PF,
now 36 states

6. Source: SSI Performance Based Funding 2014 report, Ohio Higher Education.

7. STATED POLICY IMPLEMENTATION RATIONALE
• Engage stakeholders
• Use a limited set of consistently defined metrics
• Differentiation across institution sectors/missions
• Focus on student completion and incentivize the success of
underserved “at-risk” student populations
• Significant amount of dollars allocated based on outcomes
• Phase-in of new funding policies with bridge funding available to
ease transition

8. OHIO’S METRICS
• 50% for degree completions
• 30% for course completion
• 19.7% for doctoral and medical
• 0.3% Set Asides

9. IMPLICATIONS FOR INSTITUTIONS
• Because there has been flat or declining funding from the state, if
one institution gains, another one loses
• Program prioritization in vogue aiming improve performance on
state funding metrics
• Programs with low enrollment, low graduation numbers and low
job placement rates eliminated
• Courses not required for graduation dropped, diminishing choice
• Courses considered road blocks scrutinized, diminishing quality
(maybe)

10. • Some have increased admission requirements to keep out less qualified
students, which can have huge impact on equity groups
• Much greater emphasis on course and degree completion
• Possible pressure to decrease standards, some research shows that this
has not happened. Admin has relied on faculty to maintain standards
• Ohio has $4,000 graduation bonus which has led to some institutions
offering completion grants (some students don’t re-enroll for balances as
low as $100 in parking or library fines)
• Big focus on improving advising. Faculty replaced by professional advisors,
but quality is uneven, no licensing or PD requirements
• For-profit companies analyzing data, giving early warnings to advisors
about likely drop outs
IMPLICATIONS CONTINUED

11. • When I started at CSU, 6-year grad rate (one of the main metrics used)
was never discussed, it was a dirty little secret that we were the lowest of
Ohio’s 14 state universities
• In 2009, we got a new President and transitioned to a new funding model
(PF2.0) with metrics based on First-Time, Full-Time Freshman (FTFTF)
• Formed Senate Committee on Undergrad Student Success
• Worked with registrar, bursar and financial aid office to remove
registration and graduation barriers, better for everyone but particularly
first in family and other equity groups
• Implemented web-based degree audit
• Implemented degree maps
CLEVELAND STATE UNIVERSITY

12. TRANSFORMATI0NS AT CSU
• Grad rates improved, but not enough
• Formula changed to give less emphasis to FTFTF, more emphasis on
course and degree completion
• CSU’s curriculum structure was significantly different to many other
universities. Previous presidents had tried to get faculty support to
change it, with no luck
• During my tenure as Senate President, faculty supported reducing credits
from 128 to 120, and realigning curriculum to 3-credit model, but not
without controversy
• Some loss of tuition, but the 6-yr grad rate is now almost 40%

13. Questions?