The next ‘evolution’ in higher ed’s state funding model has arrived, per report

"The United States cannot meet its higher education goals without changing the way it funds public colleges and universities," the report reads.

Complete College America, the nonprofit dedicated to improving equitable student outcomes, has long championed its model its outcomes-based funding model to help bolster graduation rates. However, it believes its next “evolution” has arrived: completion-goals funding.

After over a decade of implementation, CCA has found outcomes-based funding to be a crude method. The nonprofit believes the model inadvertently created an “unfunded mandate,” which asks institutions to perform better despite their oftentimes limited resources. Schools that serve minority student populations, like HBCUs, are disproportionately hurt since they are often the most cash-strapped institutions.

Secondly, while outcomes-based funding did help increase graduation rates, it did not ensure that the students graduating were earning quality degrees and meeting the region’s labor needs. Students earning unfruitful degrees have rendered students with a negative ROI, which has contributed to America’s student loan crisis.

Completion-goals funding flips the model on its head, providing institutions with state money upfront to work toward a collaborative objective between higher education and state policymakers. While it may require more state funding, the nonprofit describes it as a “shrewd” investment for several reasons.

First, CCA believes that more intentional collaboration between the public higher education sector and those who finance it will more effectively address the region’s labor market needs, in turn boosting graduates’ return on investment and improving the economy. Approved plans will be anchored by statewide targets that will keep colleges and universities lean, accountable and dedicated to students’ economic fruition. Lastly, completion goals funding could help reduce the nearly $1 trillion left on the table by addressing postsecondary attainment gaps by economic status, race and ethnicity.

After helping states nationwide increase their graduation rates, the nonprofit’s completion-goals funding model deepens its mission to ensure students receive more than a cap, gown, and degree.

“The United States cannot meet its higher education goals without changing the way it funds public colleges and universities,” the report reads.

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How the state and school will be challenged

Completion-goals funding will challenge states to rethink how they allocate funding to their public institutions. Instead of basing their allocation per each school on the number of enrolled students, they’d begin by analyzing its number of credential earners and the costs related to producing each graduate from a baseline year. Basing funding and related completion goals on a cost-per-graduate scale rather than enrollment provides the state more granularity in exacting its funds and producing the desired credential earners needed to satisfy a city, region, or state’s market demands.

As a result, institutions that are provided funding upfront with clear completion goal targets will be judged by their ability to create plans and proposals that show potential for meeting completion targets for in-demand credentials.

“Colleges and universities that are unwilling or unable to commit to implementing best practices should not expect to produce the required graduates and therefore should receive only base funding,” the report reads.

How schools can implement completion-goals funding, step-by-step

  1. Participate in developing a model. Co-create the funding model alongside peer institutions and state higher education officials.
  2. Identify key strategies. Find the strategies that will help enhance student success, such as developing pathways and bolstering advising.
  3. Develop a proposal. Outline improvement strategies, including related costs and an estimate of the number of graduates it will help produce. It should align with the state funding model.
  4. Submit the proposal to the state.
  5. Implement the strategies.
  6. Measure and report outcomes.
  7. Adjust budgets based on performance. Adjust based on performance against the initially outlined targets.
  8. Maintain administrative efficiency.
Alcino Donadel
Alcino Donadel
Alcino Donadel is a UB staff writer and first-generation journalism graduate from the University of Florida. His beats have ranged from Gainesville's city development, music scene and regional little league sports divisions. He has triple citizenship from the U.S., Ecuador and Brazil.

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