News From Terre Haute, Indiana

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December 11, 2011

MAUREEN HAYDEN: Higher ed tops the list in a week full of headlines

There’s a lot that went on in and around the Indiana Statehouse last week that made headlines:

The governor announced he found $300 million gone missing because of a computer software glitch; the longtime chief justice of the state’s high court announced he was stepping down; a judge ruled a lawsuit over docked pay of boycotting legislators could move forward; and a Statehouse lobbyist was picked up on a charge of soliciting a prostitute.

But of all the news that unfolded, here’s what interested me most as a tax-paying, tuition-borrowing mother: The Commission for Higher Education announced it wanted to ramp up the funding formula aimed at making the state’s universities more accountable.

The panel voted unanimously to recommend the legislature steadily ratchet up the percent of state dollars doled out to universities that is directly tied to how good a job they’re doing turning out graduates on time.

Known as performance-based funding, it ties money to some measurable outcomes, like course completion rates.

It’s not a new idea. The state currently ties 5 percent of higher-ed funds to outcomes. The commission voted to push it up to 6 percent in the next budget cycle and up to 7 for the one that follows. It also voted to refine what’s measured and to give the universities more say in what to measure.

University administrators don’t like it, but they’ll have to take their lumps. They’ve steadily raised tuition (which means more student loan debt) but only about 30 percent of their students complete their degrees on time.

Those university administrators may be peeved but they’re not alone. According to a recent report by the National Council of State Legislators, at least 17 states have either implemented performance-based funding for their colleges and universities, or are working on it.

The noble goal is to push or punish universities into focusing on producing more graduates with employable skills who can drive a state’s economy.

But it’s not going over well in the hallowed halls of academia. After Michigan’s governor pushed a modest plan for performance pay, a spokesman for the universities’ presidents there declared it “an insult.”

Could be worse: In Louisiana, the legislature plans to tie 25 percent of state funding to performance targets and promises to block tuition hikes unless their universities do a lot better keeping students in school and graduating them on time.

The judgement is out on whether it works. Over a decade, Pennsylvania slowly increased its performance-based funding from 1 to 8 percent of its higher-ed budget and it’s seen a 10 percent increase in its college graduates.

But it could backfire here in Indiana if our state universities decide to subvert the end goal by cutting off access, changing their admission or retention standards to close out or push out students they see as high-risk for failure.

Maureen Hayden is Statehouse bureau chief for the CNHI newspapers in Indiana. She can be reached at

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    March 12, 2010