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The Senate Committee on Higher Education met on May 22 to take up the following interim charge: Funding Models: Examine different models of student-focused funding for general academic institutions, including competency-based and performance funding models, and make recommendations on whether a new funding model would produce greater efficiencies and student performance.

 

This report is intended to give you an overview and highlight of the discussions on the various topics the committee took up. This report is not a verbatim transcript of the hearing; it is based upon what was audible or understandable to the observer and the desire to get details out as quickly as possible with few errors or omissions.

 

Legislative Budget Board Overview

Emily Schmidt, LBB

  • Link to LBB presentation
  • Will be discussing GAIs in bill patterns
  • Formula Method of Finance:
    • General Academic Institutions, Health Related Institutions, Lamar State Colleges and Texas State Technical Colleges are funded through an All Funds methodology which means that General Revenue and GR-Dedicated–Other Educational and General Income (E&G) are used to fund these formulas
    • “Other E&G” includes revenue generated by statutory tuition, interest on funds in the state treasury, and various fees. (Board Authorized Tuition is distributed after formula calculation, therefore does not affect the amount of General Revenue)
  • Some E&G income is set aside for specific purposes
  • GAI I&O is based on semester credit hours, weighted by discipline and level
  • Tenured faculty can receive a Teaching Experience Supplement, calculated in with I&O
  • Infrastructure Formula, which also includes the Lamar State Colleges and the Texas State Technical Colleges, allocates funding for physical plant support and utilities and is based on predicted square feet for universities’ educational and general activities produced by the Space Projection Model developed by the HECB
  • Institutions with headcount of less than 10,000 students receives Small Institution Supplement
  • Non-formula support funding is appropriated directly to institutions for special projects identified by the legislature, funded by GR or GR-D
  • GAIs do have other funds available outside of State Budget, endowments, grants, federal etc.

 

Andrew Obvrmyer, LBB

  • Funding for community and junior colleges, each college receives $1.4 million base for core operations, with additional funding for success points ($171.56 per)
  • Funding is based on a three year average of success points earned by students at each community college
  • Students are able to earn success points through eleven individual metrics
  • Highlights success points on pg 13
  • Contact hour funding is based on each community college’s share of total weighted base year contact hours
  • The base period used for the 2018-19 biennium is Summer and Fall 2016 and Spring of 2017

 

Panel 1

Rex Peebles, Higher Education Coordinating Board

  • Overview of Competency-Based Education (CBE):
    • Allows students to progress towards completion often at their own pace
    • May be organized around traditional course-based units, but not required
    • Prior learning assessments, military experience, CLEP, and AP are tools that can be used to recognize past work or educational experiences
  • CBE enrollment is largely flat, but some institutions are beginning to report growth
  • Texas Affordable Baccalaureate is Texas’ first CBE bachelor’s degree, tends to include a variety of education method – in person, online, etc.
  • Goal is to alleviate burden on students
  • Provided $170k planning grants to support these types of programs, supported by many private partners; goal is to have 12 programs around the state to provide demonstration models for other institutions
  • Has potential to decrease time and money to degree, models like CBE can make college affordable and reduce student debt
  • Strategies to support alternative pathways:
    • Expand Affordable Baccalaureate program offerings
    • Incentivize institutions to accept prior learning assessments
    • Establish a funding model that is not course-based

 

Ray Keck, Texas A&M University-Commerce

  • Began as a sceptic of CBE, had issues with the hype around the idea; while all of the supposed benefits may not be realized by CBE, it will help in reaching students who may have been looked over, dropped out, or not had access through traditional methods
  • Drop outs typically leave institutions without a degree and with debt, Texas A&M Commerce program tries to reach out to this population
  • Each student is vetted, goals assessed, etc. to try and best match them to a degree path
  • Students must meet full 120 course hours, not a watered-down degree; time to finish is typically a little over 1 year
  • Funding for this was possible through a Special Item grant, still ongoing & without this grant the program would freeze and not grow
  • Currently 1,000 students in the program, 2 faculty lines funded; hoping to see a path to self-funding, but would need to cap total number of students
  • Special Item also funds “The Institute,” which assists other institutions in setting up similar programs

 

Questions for Panel 1

  • Seliger – Do you essentially have 2 student bodies with this type of program, traditional students and CBE program students?
    • Keck, Texas A&M – We have many more than 2 student bodies, nature of Texas A&M means student body is split to match the needs and situation of the student
    • CBE course program is validated and has had a lot of work put into it
  • Seliger – So CBE has been discussed as a mix of online and in person education, but also can be only online?
    • Tailored to the student
  • Seliger – Is the substance of the student’s education the same between traditional and CBE students?
    • In content, yes; also highlights that CBE program only accepts an A or B
    • CBE is not a less rigorous or second-class degree
  • Seliger – So if the education content is the same and CBE is cheaper and faster, are you suggesting we scrap the traditional methods?
    • No, CBE focuses on adult learners who have decided on their path, traditional education allows younger students to find their “path into life”
  • Seliger – Does CBE take into account any costs paid previously for prior coursework through traditional method?
    • No, CBE cost only reflects what these students pay now
  • Buckingham – CBE is perfect for veterans
  • Buckingham – What obstacles do you see for other institutions to adopt CBE?
    • Biggest issue is understanding of CBE goal
    • Shaundra Gibson, Texas A&M – Transcript system can be a block for certain student groups like former military, CBE can help reach these populations
    • Other issues exist in financial aid, can be difficult to meet assessment, substantive etc. metrics with nontraditional instruction methods
    • CBE also needs upfront assistance through Special Item funding, without this, programs cannot continue
    • Keck, Texas A&M – Important point is that this does not undermine or weaken what institutions are already doing
  • Seliger – Will programs like this lend itself to goal of 60x30TX?
    • Yes, addresses students who would have attempted college and left with nothing
  • Seliger – Asks after life experience counting for academic credit
    • Gibson, Texas A&M – We do not allow this, we have created a program that allows students to demonstrate competencies, not PLA
  • Bettencourt – This is an example of stratified marketing, applies to a specific population; how do we figure out how to reach the target student populations?
    • Peebles, THECB – We will not meet goals of 60x30TX without targeting those students who attended college, but didn’t finish
    • Start up costs are large and can be a challenge; can work with other stakeholders to collect competencies and make sure these are available for other institutions around the state
  • Bettencourt – Should the state be looking to replicate core competency or stratified marketing where students are funneled into certain locations?
    • Making competencies available to other institutions is a good idea, goal is not necessarily to duplicate
    • Keck, Texas A&M – Agrees, goal is not to have a collection of canned courses
  • Bettencourt – How long will you be on start up cost and need a Special Item?
    • At the point where the state determines we’ve educated enough students and grown large enough; pulling back now will freeze programs and reverse positive effect
  • Bettencourt – When do you know when you won’t need
    • Gibson, Texas A&M – If we have one more year with continued growth, program can be self-funding
    • However, without funding to continue to scale up the program, will become difficult; programs are expensive to initially develop
  • Seliger – I am a big fan of these types of programs, but I think they should be done generally by formula rather than Special Item
  • Seliger – I think this is trending to be a standard part of higher education, doesn’t necessarily make sense to have special funding for standard component
    • Keck, Texas A&M – Formula cannot help create new programs as it only accounts for credit hours delivered; not possible with current formula
  • Seliger – I think the concern is how we systemize this funding
    • Gibson, Texas A&M – Important to remember that special funding is for CBE across the state, not only for A&M’s programs

 

Panel 2

Raymund Paredes, Higher Education Coordinating Board

  • Need to produce more students who complete credentials, performance-based funding can help to achieve this
  • Will not meet 60x30TX goals continuing on this course, CBE can help
  • Per-student funding has declined, and we face the challenge of educating future students who are unprepared for higher education; must therefore look at different models for delivering education
  • We need to look at better educating Latino, African American, and male students
  • Over 60% of students in K-12 are poor, and that correlates with poor education; those students will need extra help in higher education
  • Performance based funding is well established around the country
  • The Board recommends $160 million be dedicated in the next fiscal year towards a graduation bonus, this amounts to 3% of total formula funding
  • We recommend the graduation bonus be integrated into the I&O formula in the GAA
  • We propose two metrics – one for students at risk, and one for those not at risk
  • At risk students are those who qualify for Pell Grants or are economically disadvantaged
  • One concern is that performance-based funding makes it difficult for universities to plan ahead, but this system does not change the current variability due to two factors, changes in enrollment growth and changes in funding by the legislature
  • Seliger – What happens if 100% of students go in & graduation bonus eligible students exceed $160 million?
    • Would hope that the success incentivizes legislature to fund at higher levels
  • Bettencourt – Wouldn’t it be better to look at incremental performance, as opposed to putting the $160 million in across the board?
    • That $160 million would be allocated toward completions, instead of what we do now
  • Bettencourt – If we put that in, would we not want to look at incremental improvements to that rate? Are there other ideas you have looked at?
    • We have looked at best practices around the country and have concluded that the two metrics will help us reach our goal
    • Way we propose to set this up is to take a 3-year average and use this to develop a base for incremental improvement
  • Bettencourt – What was it that moved the percent?
    • Graduation rate went from 35% to 56%
  • Buckingham – Currently, schools are incentivized based on enrollment, but that doesn’t mean they’re incentivized to graduate students; aside from funding, what else do we need to be doing to help students graduate?
    • K-12 and higher education need to work closer together, need to train more teachers, provide professional development tools for teachers, provide more wrap around services, need more intrusive advising, block scheduling, etc.
    • Need to essentially re-invent higher education; there are some low-cost things we can do to improve metrics, e.g. Florida institution that improved metrics by offering office hours after class
  • Buckingham – Do you have any recommendations for a regulatory approach?
    • We need to let the institutions come up with the best models for themselves, we incentivize innovation by attaching dollars to it
  • L Taylor – Are we doing more with less from the state or overall?
    • From the state, institutions have become more efficient
  • L Taylor – Can you explain the example scenario from your handout?
    • The institution performed the same, but received more funding due to the 8% increase in funding
  • L Taylor – Where did the 8% come from?
    • State funding
  • Seliger – What is UTSA doing that others are not to achieve a 21% increase over 15 years?
    • UTSA wants to be a tier 1 research institution, raised admission requirements to match
    • Put academic success supports into place, leadership made it clear that primary responsibility of deans and program was to graduate students
  • Seliger – Why would a $1,000 graduation bonus lead to less time to complete and less debt?
    • Bonus goes to the institution, not the student; gives institution an incentive to improve graduation outcomes
  • Seliger – Shouldn’t institutions try to improve outcomes on their own anyways? Are we only trying to encourage the regular responsibilities of these institutions?
    • Has been said that higher education went “off the rails” when it shifted away from student focus
    • We need to communicate the message as strongly as we can that the most important responsibility of an institution is to help students complete their credentials

 

Scott Boelscher, HCM Strategists, Lumina Foundation

  • Highlights Strategy Labs program, run by Lumina Foundation and supports goal of 60% education achievement by 2025 and encouraging students across demographics
  • Performance funding began in the 1970s, stalled out soon after; programs did not focus on graduation, had vague guidelines, and di not focus on incremental success
  • Model was revisited and many states develop “outcomes-based funding,” which prioritized these areas
  • Important to remember that performance funding models across states are highly variable, some even damaging
  • Lumina Foundation developed a report studying these models and recommending best practices, including:
    • Anchoring model to an attainment goal like 60x30TX
    • Prioritize degree and certificate completion, limited and clearly defined; recommending using solid number rather than rates
    • Should encourage success of priority populations like low-income, returning adults, and minority populations
    • Funding allocated by model should be large enough to draw attention, should be part of the base funding
    • Should be formula-driven, should be some expectation of what future funding will be
  • No clear “magic number” for funding, research shows it should be consistent and phased in to allow for institutional response
  • Seliger – How do you differentiate student bodies without specific goals inside metrics?
    • Many different models, some models put additional funding onto certain degrees
  • Seliger – Is the bonus awarded for increase in rates or all graduates?
    • All graduates
  • Seliger – So there is a bonus for those who would graduate in four years from today?
    • Would be based on incremental growth

 

Panel 3

Austin Lane, Texas Southern University

  • Focusing on pathways to success for at-risk students
  • 80% of degrees at TSU were awarded to at-risk students, 90% of TSU students rely on some form of financial aid, 85% are from Texas
  • Several low-performing high schools feed into TSU, can mean unprepared students; TSU runs a Summer of Success program to help prepare students for college; includes student coordinator, student seminar, communication with parents given student consent
  • Began this program in 2016 and achieved a 80-90% persistent success rate for participating students
  • TSU focuses on incremental improvement, trying to build supports into the core operations of the university through counseling, advising, etc.; TSU focusing on improving internal metrics
  • Recommendation indicate that these functions are important for institutions with ~50% at-risk population, TSU has 80%
  • Seliger – What does a competency-based model mean to you?
    • Definitely not PLAs, looking to students who can demonstrate that they have certain aptitudes or can earn certain credits
    • Not focused on this currently, looking now simply into providing more courses online
  • Seliger – How many student advisors do you have now?
    • 14 currently, in process to hire 8 more; important for success of at-risk students
  • Bettencourt – Is student growth at TSU coming from more of the feeder schools, persistence, other factors?
    • Combination of factors, prime area of growth is from influx of students from community colleges

 

Pablo Arenaz, Texas A&M International University

  • Majority of students fall into at-risk categories, 69% on Pell grants, 78% receive financial aid, large number of Hispanic students
  • Due to student success program focusing on at-risk students and special funding, persistence rate has increased
  • Program focusing on several “pillars”:
    • Focused on several mitigating academic challenges through strong supplemental instruction and tutoring programs
    • Developing student identity through common reading and skills courses
    • Monitoring student success through intrusive advising, requires constant support & funding
  • Focusing on at-risk students and improving outcomes leads to direct returns on university investment
  • Bettencourt – Why do we call it intrusive advising, seems like we should have a better name, “helpful” advising, etc.
    • This name has caught on; means being constantly engaged with the student and encouraging them in certain decisions, also being realistic about student options

 

Chris Maynard, Sam Houston State University

  • University serves a large number of at-risk students
  • Through Frontier Set Grant, found that different student supports needed to be combined, including:
    • Focus on intrusive advising throughout a student’s education
    • Corequisite model where students complete core classes at the beginning of college career
    • Looking into having different core math paths for different majors
    • Increasing number of online courses
  •  Also runs Elite mentoring program for African-American and Hispanic male students, works through network of colleagues and mentors, textbook funding, seminars, etc.
  • Seliger – Looking at your GPA comparison data, is the 2017 increase an aberration?
    • No, rather the 2016 GPA dip is an aberration, 2017 continues the trend
  • Seliger – Counseling seems to be key to all of these efforts
    • Solution is engagement throughout the student career
  • Bettencourt – What do we have to do to incentivize engagement?
    • SHSU – Can’t have one program for every student, Elite program helps a certain student population, other programs help others
    • Texas A&M International – This is the key, having multiple avenues to engage students is important, as is continuation throughout the student’s career
  • Bettencourt – Interested in models that exist in majority minority institutions, these are best practices that need to be replicated
    • TSU – We are aware of the population coming into our universities, able to counsel incoming students and parents on effective pathways
  • Bettencourt – The one marker we are sure of is poverty

 

Public Comment

Tyler Sheldon, Texas State Employees Union

  • When public institutions rely more heavily on performance-based funding and focus on graduation, it shifts focus away from quality of education and puts it on meeting requirements
  • Can unfairly disadvantage certain student groups like single parents