INDIANAPOLIS — Indiana’s seven public universities are taking steps to boost their graduation rates and increase the number of degrees in key areas like science and technology as part of a state push to tie aid for higher education to performance.
The Indiana Commission for Higher Education has developed a performance-based funding formula in an effort to increase the number of college graduates in the state.
The funding formula began in 2003 with incentives for universities that do research, the Indianapolis Business Journal reported. It expanded in 2007 with rewards for gains in degrees, on-time graduation rates and successful transfer students.
It now rewards schools for growth in number of overall degrees, on-time graduation rates, student retention, number of degrees in science, technology, engineering and math and those granted to students receiving federal PELL grants. Remediation rates and a productivity metric defined by each school also factor into the calculations.
Though public universities continue to receive funding based on enrollment, performance-based funding is growing in importance. The state budget lawmakers are writing this year calls for raising the performance-based calculation from 5 percent of each school’s state funding to 6 percent in 2014 and 7 percent in 2015.
“You are seeing strategies within colleges and universities to respond to these metrics because these metrics are responding to student needs,” said Teresa Lubbers, a former state senator who now leads the Commission of Higher Education.
Ball State University has a lot riding on performance funding. The school would see no increase in funding over the next two years under the budget state lawmakers are crafting. Only Indiana State University in Terre Haute, which would see a 1.1-percent loss in funding, has fared worse under the performance-based funding formula.
Ball State President Jo Ann Gora told the House Ways and Means Committee in January that the school has been at a disadvantage because it has worked to raise admission standards and the quality of programs while keeping enrollment around 16,000. That strategy, along with Ball State’s focus on non-STEM degrees, has hurt its funding, she said.
“Because our strategy has been to get better, not bigger, this is not a strategy that has been rewarded by the funding formula — although we think this is a good strategy for Hoosiers,” Gora said. “The formula is a one-size-fits-all. And yet the institutions were asked to differentiate.”
She said Ball State hopes to add degrees in computer software engineering and other STEM areas because they command more state money under the funding formula.
Lubbers noted that Ball State already has 27 degree programs that count as STEM degrees.
Ivy Tech Community College also plans changes so it can help more students transfer to four-year institutions and boost the number of technology students earning a credential before leaving.
Ivy Tech President Tom Snyder said he hopes a plan to restructure into four divisions helps identify which programs can grow.
Lubbers said the commission has worked to adjust the funding formula to account for the different missions of each public university. Research-based incentives apply to IU, Purdue and Ball State, but not the others.
Purdue Provost Tim Sands said performance funding affects less than 1 percent of the budget on Purdue’s West Lafayette campus. But he said it’s still important to keep state priorities in mind.
“The money is not big enough to drive behavior by itself at West Lafayette,” Sands said. “What it really does is encourage us to have the discussion [with state leaders], to align our values where we can.”
