Transcript Illinois Higher Education Performance Funding Model Performance Funding Steering Committee Meeting January 6, 2012 Dr.

Illinois Higher Education
Performance Funding Model
Performance Funding
Steering Committee Meeting
January 6, 2012
Dr. Alan Phillips
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Purpose
The purpose of this presentation is to propose
a performance funding model that will be
incorporated in the FY 2013 budget
recommendations that meet the intent of
Public Act 97-320 (HB 1503), the Performance
Funding legislation, and that support the goals
of the Illinois Public Agenda.
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Topics to be Covered
• The status of higher education in the State of Illinois
– The current situation
– How we are doing
– What we are doing to improve the situation
• Performance Funding
–
–
–
–
What we have accomplished
The recommended four-year model
The recommended two-year model
Performance funding results
• Budgetary considerations and preliminary
recommendations
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The Status of Higher Education
in the State of Illinois
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The Illinois Public Agenda for
College and Career Success
• A tale of two Illinois
– One Illinois is well educated and prosperous
– The other is vastly underserved educationally and struggling economically,
with severely constricted opportunities.
• Between these two states of Illinois is a “prosperity gap” that
relates directly to disparities in educational attainment, by
race/ethnicity, by income, and by region.
• The bottom line is that “Illinois needs effective and quality
education for all people”.
• Our vision is the pathway to one Illinois, where all residents have
affordable access to high-quality educational opportunities that
prepare them for the jobs of the present and future.
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Public Agenda Goals
1. Increase Educational Attainment.
2. Ensure college affordability for students, families, and
taxpayers.
3. Increase the number of high-quality post-secondary
credentials.
4. Better integrate Illinois’ education, research, and
innovation assets to meet economic needs of the state.
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The Challenge
• According to the Higher Education Finance Study
Commission :
– Colleges and Universities are starving for dollars.
– Illinois’ student financial aid system has been eroded at a
time when low-income families have less ability to pay for
college.
– Unfunded state mandates and regulatory requirements
undermine efficiency and productivity.
– Institutions often squeeze cost savings out of instruction
and student support services.
– The burden of financing a college education has
increasingly fallen on students and families.
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The Challenge
• State funding for higher education has declined steadily over
the last 15 years.
• The State is currently experiencing a debt crisis.
• Pensions costs are exceeding the rate of state revenue growth.
• The State funding situation has created a cash flow problem
for colleges and universities.
• Over the past few years there has been very little funding for
capital projects, to include renovation and remodeling.
• The State is facing potential decreases in financial aid funding
for both MAP and Pell.
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How Are We Doing?
Below Average – But Not By Much
Measure
Range*
US Average* Illinois*
• College-Going Rates of HS Graduates
(45.7%-77.4%) 63.3%
57.4%
• Transition & Completion Rates HS to College/100 Students
(6.6-30.2)
20.5
20.4
• % of 18-24 Year Olds Enrolled in College
(18.6%-52.8%)
36.2%
34.9%
• Credentials and Degrees Awarded/100 FTE (2 Yr)
(8.6-31.8)
14.5
12.9
• Credentials Awarded /$100K of Ed and Related Exp
(1.01-2.69)
1.78
1.75
• Average Loan Amount Students Borrow Each Year
($4,122-$5427) $4,608
$4,698
• Bachelors Degrees Awarded/100 Undergraduates
(5-14.7)
9.7
9.6
• State and Local Spt for Higher Ed Operational Exp/Capita
($104-$710)
$294
$293
• Undergrad Credentials/100 FTE Students (Race/Ethnic Gap) (-0.1%-7.4%)
3.5%
3.6%
• 6 Yr Grad Rates at 4 Yr Institutions (Race/Ethnic Gap)
(-13.7%-27.6%) 11.1%
19.1%
• % of Adults w/Assoc Degree or Higher (Race/Ethnic Gap) (-5.75%-26.12%) 13.74% 15.84%
*Data is from the National Center for Higher Education Management Systems (www.higheredinfo.org).
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How Are We Doing?
Above Average
Measure
• 1st Time Freshmen to Sophomore Retention Rates (4-Yr)
• % of Adults 25-64 with an Associates Degree or Higher
• Degrees and Credentials Awarded/100 Enrolled (2-Yr)
• Associate Degrees Awarded/100 Graduates 3 Yrs Earlier
• % of Adults 25-64 with a Bachelors Degree or Higher
• Credentials & Degrees Awarded/100 FTE Students (4 Yr)
• Bachelors Degrees Awarded/100 Graduates 6 Yrs Earlier
• Six Yr Graduation Rates of Bachelor’s Students
• Credentials & Degrees Awarded/$100K Total Revenues
• Total Education Revenues/Full-Time Equivalent Student
• Family Share of Public Higher Ed Operating Expenses
• Grant Aid to Low-Income Families as a % of Pell Grant
• State and Local Support Per FTE Student
Range*
US Average* Illinois*
(64.6%-85.4%) 76.9% 80.0%
(26.4%-50.2%) 38.11% 41.4%
(3.6-32.7)
14.0
14.4
(10.8-53.8)
23.8
25.3
(19.34%-41.76%) 29.76% 33.24%
(15.2-25.3)
20.8 24.3
(21.4-97.7)
53.5
55.4
(26.9%-69.2%) 55.5% 58.6%
(.90-2.96)
1.84 1.86
($8,580-$19,523) $11,026 $10,779
(11.5%-79.3%)
36.2% 28.9%
(0.0-108.4)
45.9
82.3
($3,167-$15,151) $7,059 $7,585
*Data is from the National Center for Higher Education Management Systems (www.higheredinfo.org).
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Degrees & Certificates awarded per FTE vs.
Total Funding per FTE (2006-2007)
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Low Resources, High Production
High Resources, High Production
CO
29
UT
OK
FL
26
Performance:
Degrees
Awarded per
100 FTE 23
KY
WA
KS WI
SDGA MN
AZ
ND
WV
MT
LA
NH
IA
IDIL
VA IN
OH SC
US
NE
AR OR
TX TN
MS MO
NC NM
20
CT
MI
PA
ME AL MD
VT
HI
NJ
MA
NY
DE
WY
AK
RI
NV
17
CA
Low Resources, Low Production
14
5,000
8,000
High Resources, Low Production
11,000
14,000
17,000
20,000
Resources: Total Funding per FTE
We are in the quadrant where we want to be.
Source: SHEEO State Higher Education Finance Survey 2008: NCES IPEDS Completions Survey
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State Initiatives To Achieve the Goals
of the Public Agenda
• The development of a K-12 college and career curriculum
(Common Core) and improved teacher and school leader
standards.
• The implementation of the Illinois Articulation Initiative to
align curriculum from high schools through community
colleges to four year universities.
• Establishment of a Statewide P-20 Longitudinal Data System.
• The implementation of Performance Funding for colleges and
universities in the State of Illinois.
Plus all of the programs and initiatives implemented by the colleges
and universities to further the achievement of the Public Agenda
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Performance Funding
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Performance Funding Objective
• To develop a performance funding model for public
universities that is…
– Linked directly to the Goals of the Illinois Public Agenda
and the principles of Public Act 97-320
– Equipped to recognize and account for each university’s
mission and set of circumstances
– Adjustable to account for changes in policy and priorities
– Not prescriptive in how to achieve excellence and success
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Public Act 97-320 (HB 1503)
• Performance Metrics Shall:
– Reward performance of institutions in advancing the
success of students who are:
•
•
•
•
Academically or financially at risk.
First generation students.
Low-income students.
Students traditionally underrepresented in higher education.
– Recognize and account for the differentiated missions of
institutions of higher education.
– Focus on the fundamental goal of increasing completion.
– Recognize the unique and broad mission of public
community colleges.
– Maintain the quality of degrees, certificates, courses, and
programs.
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What We Have Accomplished
• Identified the key issues.
• Developed performance funding principles.
• Identified appropriate performance measures and subcategories.
• Developed performance funding models for both 2-year and
4-year colleges and universities.
• Acquired initial data.
• Received input from steering committee members, colleges
and universities, other groups, and individuals.
• Finalized the performance funding model for both four-year
and two-year colleges and universities.
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Performance Funding Model
4-Year Public Universities
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Performance Funding Model Steps
(4-Year Public University)
• Step 1 – Identify the performance measures or metrics that support the
achievement of the state goals.
• Step 2 – Collect the data on the selected performance measures
• Step 3 – Award an additional premium (i.e. 40%) for the production of
certain desired outcomes such as completions by underserved or
underrepresented populations
• Step 4 – Normalize (scale) the data, if necessary, so it is comparable
across variables.
• Step 5 – Weight each of the Performance Measures that reflects the
priority of the Measure and the mission of the institution.
• Step 6 – Multiply and sum the Scaled Data times the Weight to produce
the Weighted results.
• Step 7 – Use the Weighted results (or Total Performance Value) to
distribute performance funding.
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Performance Measures
Step 1 – Identify the performance measures or metrics that support
the achievement of the state goals.
Step 2 – Collect the data on the selected performance measures
(3-year averages)
Measure
• Bachelors Degrees (FY07-09)
• Masters Degrees (FY07-09)
• Doctoral and Professional Degrees (FY07-09)
• Undergraduate Degrees per 100 FTE (FY07-09)
• Education and General Spending per Completion (FY09-11)
• Research and Public Service Expenditures (FY09-11)
• Graduate Degrees per 100 FTE (FY07-09) (?)
• Cost per FTE (FY09-11) (?)
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Source
IPEDS
IPEDS
IPEDS
IPEDS
RAMP
RAMP
IPEDS
RAMP
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Sub-Categories
Step 3 – Award an additional premium for the production
of certain desired outcomes such as completions by
underserved or underrepresented populations
Sub-Category
Weight
• Low Income (Pell/Map Eligible)
40%
• Adult (Age 25 and Older)
40%
• Hispanic
40%
• Black, non-Hispanic
40%
• STEM & Health Care (by CIP Code) 40%
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Scaling Factors
Step 4 – Normalize (scale) the data, if necessary, so it is
comparable across variables.
• Averaged the measures across all of the institutions.
• The average number of bachelors degrees will serve as the base value.
• Determine a scaling factor that will normalize the rest of the averages
to the average number of bachelors degrees.
• Adjust the scaling factors as appropriate (i.e. Masters & Doctorates).
• Multiply all of the initial data by the scaling factor to normalize the
data.
Measure
Universities 1-12 (Avg)
• Bachelors Degrees (FY07-09)
4,445
• Masters Degrees (FY07-09)
1,152
• Doctoral and Professional Degrees (FY07-09)
796
• Undergraduate Degrees per 100 FTE FY(07-09)
26
• Education and General Spending per Completion (FY09-11)
4,639
• Research and Public Service Expenditures (FY09-11)
10,803,117
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Scaling Factor Adjusted Scaling Factor
1.00
1.00
3.86
1.00
16.25
2.00
173.64
200.00
-.96
-1.00
.0004115
.0005000
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Performance Measure Weights
Step 5 – Weight each of the Performance Measures that reflects
the priority of the Measure and the mission of the institution.
Research-Very High
Weights Based on Institutional Mission
Bachelors Degrees
Masters Degrees
Doctoral and Prof Degrees
Undergrad Degrees per 100 FTE
Education Spending/Completion
Research and Public Service Expenditures
UIUC
22.5%
15.0%
15.0%
5.0%
2.5%
40.0%
100.0%
Doctoral/
Research
Research-High
UIC
22.5%
15.0%
15.0%
5.0%
0.0%
42.5%
100.0%
NIU
37.5%
20.0%
10.0%
10.0%
2.5%
20.0%
100.0%
SIUC
37.5%
20.0%
10.0%
10.0%
0.0%
22.5%
100.0%
ISU
40.0%
22.5%
7.5%
12.5%
2.5%
15.0%
100.0%
Masters Colleges & Universities (Large)
Weights Based on Institutional Mission
Bachelors Degrees
Masters Degrees
Doctoral and Prof Degrees
Undergrad Degrees per 100 FTE
Education Spending/Completion
Research and Public Service Expenditures
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SIUE
45.0%
25.0%
5.0%
15.0%
2.5%
7.5%
100.0%
WIU
45.0%
25.0%
2.5%
15.0%
10.0%
2.5%
100.0%
EIU
45.0%
27.5%
0.0%
15.0%
10.0%
2.5%
100.0%
NEIU
45.0%
27.5%
0.0%
15.0%
10.0%
2.5%
100.0%
CSU
47.5%
25.0%
2.5%
15.0%
7.5%
2.5%
100.0%
GSU
50.0%
37.5%
0.0%
0.0%
10.0%
2.5%
100.0%
UIS
50.0%
37.5%
2.5%
0.0%
7.5%
2.5%
100.0%
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Performance Value Calculation
Step 6 – Multiply and Sum the Scaled Data times the Weight to
produce the Total Performance Value.
Data
Measure
• Bachelors Degrees
3,921
• Masters Degrees
1,552
• Doctoral and Professional Degrees
209
• Undergraduate Degrees per 100 FTE
23.2
• Education and General Spending per Completion 3,788
• Research and Public Service Expenditures
5,486,590
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(Data+Premium) Total Performance
Value
x Scale xWeight =
Data + Premium Scale
6,813
1
6,813
35.0%
2385
1,754
1
1,754
25.0%
438
229
2
458
5.0%
23
23.2
200
4,646
10.0%
464
3,788
-1
-3,788
5.0%
-189
5,486,590
.0005
2,743
20.0%
549
100.0%
3580
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Funding Allocation
Based on Performance
Step 7 – Use the Weighted results (or Total Performance Value) to
distribute funding based on a Pro Rata Share of the total
amount of funds set aside for performance funding.
Percentages for Distribution
Total Performance Value
Percentage of Total
Distribution: Pro Rata
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University 1
University 2
University 3
Total
10,840
62.7%
4,435
25.6%
2,027
11.7%
17,302
100%
$256,000
$117,000
$1,000,000
$627,000
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Performance Funding Model
• All steps are identical at each university
• The model accounts for each institution’s unique mission by
adding a weight to each measure.
• Each institution’s formula calculation is independent.
• The formula calculation for each institution will change each
year based on annually updated data.
• The funding allocation is competitive.
• Funds are distributed on a pro rata basis according to each
institution’s formula calculation.
• The model is not prescriptive in how to achieve excellence
and success (what, not how).
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Performance Funding Model
Community Colleges
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Performance Funding Model
(Community Colleges)
• There are thirty-nine community colleges.
• The community college model contains six separate measures.
• Each measure is allocated an equal portion of the total
performance funding amount.
• Each college competes for a portion of the funding for each
measure.
• Those colleges that show a decrease in performance receive no
funds based on performance.
• Those colleges that show an increase in performance receive a
pro-rata share of the funding allocation for that measure based
on the increase in their performance.
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Performance Funding Measures
(Community Colleges)
• Degree and Certificate Completion.
• Degree and Certificate Completion of “At Risk” students.
• Transfer to a four year institution.
• Remedial and Adult Education Advancement.
• Momentum Points.
• Transfer to a community college.
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Performance Funding Model
(Community College Example)
• Measure 1 – Students who completed a degree or certificate
• Model (Part 1) = Percentage change in number of associate degrees
awarded from FY08-FY09.
FY 2008 Number of
Associate Degrees
Awarded
College 1
College 2
College 3
College 4
….
College 39
•
•
575
1,803
270
1,484
…..
329
25,130
FY 2009 Number of
Associate Degrees
Awarded
533
2,361
243
1,630
….
350
26,460
%
Change
-7.3%
30.9%
-10.0%
9.8%
….
6.4%
Greater
than
Zero
-.309
-.098
….
.064
2.585
Allocation
-$9,579
-$3.045
….
$1,976
$80,000
Pro Rata Share = $80,000/2.585 = $30,951
Funding Allocation = Amount of Increase X Pro Rata Share
–
(i.e. .309 X 30,951 = $9,579)
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Degree & Certificate Completion
• Measure 1 – Students who completed a degree or certificate
• Model (Part 1) = Percentage change in number of associate degrees
awarded from FY08-FY09.
• Range of Results = - 14.3% to +30.9%
• Number of colleges receiving funding – 26
• Range of Increase = (.2%-30.9%) or (.002 to .309)
• Funding Allocation = $80,000
• Total of increase for all 26 schools = 2.585
• Pro Rata Share = $80,000/2.585 = $30,951 (i.e. 1 share = $30,951)
• Funding Allocation = Amount of Increase X Pro Rata Share
– (i.e. .002 X $30,951 = $74)
• Range of Allocation = $74 to $9,579
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Degree & Certificate Completion
• Measure 1 – Students who completed a degree or certificate
• Model (Part 2) = Percentage change in number of certificates awarded from
FY08-FY09.
• Range of Results = - 49.6% to +103.8%
• Number of colleges receiving funding – 24
• Range of Increase = (.9%-103.8%) or (.009 to 1.038)
• Funding Allocation = $40,000
• Total of increase for all 24 schools = 5.324
• Pro Rata Share = $40,000/5.324 = $7,512 (i.e. 1 share = $7,512)
• Funding Allocation = Amount of Increase X Pro Rata Share
– (i.e. .009 X $7,512 = $64)
• Range of Allocation = $64 to $7,797
Measure 1
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•
•
•
Total Allocation for Measure 1 = $120,000
Total Number of colleges receiving funding = 35
Range of Allocation = $331 to $9,579
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Degree Production of At-Risk Students
• Measure 2 – At-risk students who completed a degree or certificate (i.e.
students with Pell or taking remedial courses)
• Model = Percentage change (number of Pell recipients + number of
students who have taken remedial courses) from FY08-FY09.
• Range of Results = - 28.1% to +26.5%
• Number of colleges receiving funding – 20
• Range of Increase = (2.3%-26.5%) or (.023 to .265)
• Funding Allocation = $120,000
• Total of increase for all 20 schools = 2.913
• Pro Rata Share = $120,000/2.913 = $41,201 (i.e. 1 share = $41,201)
• Funding Allocation = Amount of Increase X Pro Rata Share
– (i.e. .023 X $41,201 = $938)
• Range of Allocation = $938 to $10,936
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Transfer to a Four Year Institution
• Measure 3 – Students who transfer to a four year institution within 3 years
• Model = Percentage of Fall 2006 entrants who transferred to 4-year
institutions by Fall 2010.
• Range of Results = 12.3% to 35.8%
• Number of colleges receiving funding – 39
• Range of Increase = (12.3%-35.8%) or (.123 to .358)
• Funding Allocation = $120,000
• Total of increase for all 39 schools = 10.778
• Pro Rata Share = $120,000/10.72 = $11,134 (i.e. 1 share = $11,134)
• Funding Allocation = Amount of Increase X Pro Rata Share
– (i.e. .123 X $11,134 = $1,375)
• Range of Allocation = $1,375 to $3,988
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Remedial and Adult Education Advancement
• Measure 4 – Remedial students who advance to college level work.
• Model = Percentage of FY 2009 remedial students who advanced to college
level courses.
• Range of Results = 43.8% to 100%
• Number of colleges receiving funding – 39
• Range of Increase = (43.8%-100%) or (.438 to 1.0)
• Funding Allocation = $120,000
• Total of increase for all 39 schools = 23.82
• Pro Rata Share = $120,000/23.82 = $5,039 (i.e. 1 share = $5,039)
• Funding Allocation = Amount of Increase X Pro Rata Share
– (i.e. .438 X $5,039 = $2,207)
• Range of Allocation = $2,207 to $5,039
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Momentum Points
• Measure 5 – 1st time/PT students completing 12 credit hours w/in the first year,
1st time/PT students completing 24 credit hours w/in the first year,
and Adult Education and Family Literacy level (AEFL) gains.
• Model = % change (number of students completing 12 CR + number of students
completing 24 CR + number of students with an AEFL level gain) from
FY08-FY09).
• Range of Results = -53.9% to 69.6%
• Number of colleges receiving funding – 22
• Range of Increase = (.9% to 69.6%) or (.009 to .696)
• Funding Allocation = $120,000
• Total of increase for all 22 schools = 6.478
• Pro Rata Share = $120,000/6.478 = $18,529 (i.e. 1 share = $18,529)
• Funding Allocation = Amount of Increase X Pro Rata Share
– (i.e. ..009 X $18,529 = $171)
• Range of Allocation = $171 to $12,898
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Transfer to Another Community College
• Measure 6 – Community college students that transfer to other community
colleges.
• Model = Percentage change (students transferring from one community
college to another community college) from (FY06-FY09) to (FY07-FY10).
• Range of Results = 53.7% to 155.4%
• Number of colleges receiving funding – 39
• Range of Increase = (53.7%-155.4%) or (.537 to 1.554)
• Funding Allocation = $120,000
• Total of increase for all 39 schools = 37.01
• Pro Rata Share = $120,000/37.01 = $3,242 (i.e. 1 share = $3,242)
• Funding Allocation = Amount of Increase X Pro Rata Share
– (i.e. .537 X $3,242 = $1,741)
• Range of Allocation = $1,741 to $5,038
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Performance Funding Model
(Community Colleges)
• All steps are identical for each measure.
• Each college competes independently for funding associated with each
measure.
• Funds are distributed on a pro rata basis according to each institution’s
increase in performance.
• No funds are allocated for a decrease in performance.
• The formula calculation for each institution will change each year based
on annually updated data.
• The model can be scaled relative to the amount of funds allocated to
performance funding.
• The funds allocated to the community colleges based on this
performance funding model range from $30,587 to $8,914 based on a
total performance funding allocation of $720K.
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Budgetary Considerations
and Recommendations
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Budgetary Considerations
• Declines in State funding for colleges and universities may
continue.
• Colleges and universities continue to address unfunded state
mandates and regulatory requirements.
• The availability of financial aid continues to be a problem.
• The performance funding model needs to be more fully
developed in order to refine the measures and sub-categories.
• Colleges and universities have not been able to impact their
performance as the current model is based on performance
prior to the implementation of performance funding.
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Performance Funding
Budget Recommendations
• Additional funding should be allocated to performance if
possible.
• Performance funding should be implemented slowly starting
with small funding amounts and then increasing the amount
allocated to performance over time.
• There should be a stop-loss provision that can be increased
over time.
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Proposed Performance Funding
Budget Recommendation
Step Budget Recommendation (4-Year Institutions)
• Step 1 – Flat or Level Budget from FY 12 Funding.
– Flat budget with no more than .5% (stop-loss) of the budget set aside
for Performance Funding (approx $6M)
• Step 2 – Restoration of Budget to FY 11 Level.
– Restoration of the 1.1% reduction in FY12 funding, with the 1.1%
restoration allocated to performance funding.
• Step 3 – Same as for Step 2 with regard to performance
funding. Additional base funding will be requested for specific
initiatives and programs
Budget Recommendation (Community Colleges)
• A set-aside of $720K of which $120K will be allocated to each
of the six performance measures.
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Way Ahead
• Present final performance funding model recommendations
to the IBHE Board February 7th along with the FY2013 higher
education budget submission, which will include our
performance funding recommendation.
• Continue work to refine the performance funding model and
acquire more accurate and comprehensive data in preparation
for the FY 2014 budget submission and performance funding
recommendation.
This is a dynamic process. We will continually work
to improve and refine the model.
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Questions/Comments?
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