1. THECB Legislative Agenda Promoting Student Success Aligning Funding with State Education and Economic Development Goals Commissioner Raymund Paredes

2. Page 2 11/2010 Texas has increased annual degree production since 2000… …but too many students are falling through the cracks at too high a cost. Source: THECB 7 th Grade Cohort Data, THECB Financial Aid Database THECB Legislative Agenda: Aligning Funding with State Goals

3. Page 3 11/2010 THECB Legislative Agenda: Aligning Funding with State Goals The THECB’s legislative agenda is designed to increase postsecondary student achievement in the most cost-effective manner that aligns state resources with state goals in education and economic development.  Outcomes-Based Funding for Institutions  TEXAS Grant Priority Model  Cost-Efficiency Strategies

4. Texas must align funding for higher education with state goals: increasing student success responding to the economic development needs of the state Page 4 11/2010 THECB Legislative Agenda: Aligning Funding with State Goals Outcomes-Based Funding

5. The THECB recommends fully funding enrollment growth in the biennium For FY12/13, THECB recommends level funding with a 4.5% ($162.4 M) increase for projected enrollment growth at universities Page 5 11/2010 For FY12/13, THECB recommends level funding with a 19% ($353 M) increase for projected enrollment growth at CTCs. THECB Legislative Agenda: Aligning Funding with State Goals

6. UniversitiesCommunity/ Tech. Colleges Funding: Enrollments 90% * 90% Funding: Outcomes 10% Primary Outcomes MetricB.A. DegreesEducational Milestones At-Risk Student Metrics At-risk degrees, Predicted Grad. Rate Dev. Ed. completion Phase-in Provision Implement in 2013 Implement in 2013 Special Emphasis Critical Field Degrees Gaining college readiness; transfers to university Outcomes-Based Funding Page 6 11/2010 *Funding for graduate and professional enrollments at universities will continue at 100% THECB Legislative Agenda: Aligning Funding with State Goals

7. Myth Buster #1: The outcomes-based funding methodology will result in funding reductions for Texas higher education institutions. Fact: Higher education funding is affected by two variables: total appropriations and performance (change in enrollments). The outcomes-based methodology has no impact on appropriation levels. However, the new methodology will now offer two ways to improve performance: increasing enrollments (90%) and increasing outcomes (10%). Page 7 11/2010 THECB Legislative Agenda: Aligning Funding with State Goals

8. Myth Buster #2: Outcomes-based funding would encourage institutions to limit access to only those students most likely to graduate. Fact: 90% of all funding still depends on enrollments— reducing or restricting enrollments would reduce a lion’s share of overall funding for the institution. Outcomes-based funding deliberately includes metrics that reward institutions for helping at-risk students. Institutions that both enroll and graduate more at-risk students will gain the greatest share of state funding allocations. Page 8 11/2010 THECB Legislative Agenda: Aligning Funding with State Goals

9. Outcomes-Based funding will better align state resources with state goals Page 9 11/2010 Integrates state’s Success goals into funding formula currently focused on Participation goals exclusively; Encourages institutions to increase productivity in critical fields directly aligned with economic development needs; and Produces better results for students, with special focus on at-risk students THECB Legislative Agenda: Aligning Funding with State Goals

10. Improve student outcomes to better match the significant investment in financial aid by: rewarding financially needy students who worked hard and performed well in H.S.; and realigning the TEXAS Grant program with P-12 reform measures Page 10 11/2010 THECB Legislative Agenda: Aligning Funding with State Goals TEXAS Grant Priority Model

11. Page 11 11/2010 6,461 Needy students who exceeded minimum standards Non-TEXAS Grant recipients exceeding min. eligibility thresholds by EFC (FY08-FY09) In FY 08-FY 09 alone, Texas missed an opportunity to invest in… THECB Legislative Agenda: Aligning Funding with State Goals

12. Page 12 11/2010 The TEXAS Grant Priority Model is deeply rooted in substantial P-12 reforms enacted by Texas Legislature since TEXAS Grant was launched in 1999. Texas Success Initiative College Credit Programs Post-Algebra II Tract College and Career Readiness Standards 200320062008 THECB Legislative Agenda: Aligning Funding with State Goals

13. Page 13 11/2010 Criteria Category #1 Advanced Academic Programs Criteria Category #2 TSI Readiness Criteria Category #4 Advanced Math Criteria Category #3 Class Standing  Top One-Third; or  B Average  12 hours of College Credit Programs (e.g. dual-credit, AP Courses) ; or  DAP; or  International Baccalaureate Program Post-Algebra II  Meet thresholds on TSI Assessments; or  Qualify for TSI Exemption To receive priority designation, a student must have an EFC of $4,000 or less and achieve standards in any 2 of these 4 categories The Priority Criteria THECB Legislative Agenda: Aligning Funding with State Goals

14. Myth Buster #1: The Priority Model will create a disadvantage for low- income or historically underserved populations. Fact: The Priority Model will serve the same needy student population by maintaining current financial need thresholds for eligibility. THECB analysis shows that 70% of all needy students would meet the proposed priority criteria. THECB analysis shows that the ethnic/racial/income-level characteristics would be consistent with the most recent five-year history of the program. Page 14 11/2010 THECB Legislative Agenda: Aligning Funding with State Goals

15. Myth Buster #2: Institutions will experience a change in their share of funding based on how many priority students they enroll. Fact: The THECB will continue allocating TEXAS Grant funding using the same methodology.  THECB will first allocate funding to all renewal students.  Then, depending on availability of state funding, institutions will receive a share of TEXAS Grant funding based on total population of needy students, not priority students. Only a change in total state appropriations or a change in total population of needy students could change institutional funding levels. Page 15 11/2010 THECB Legislative Agenda: Aligning Funding with State Goals

16. Total Cohort: 14,599 TEXAS Grant Recipients: 7,413 TEXAS Grant: The Priority Model Student outcomes are better 6-year Graduation Rates, TEXAS Grant Recipients Priority vs. RHSP by Ethnicity ( 2004-2009 Cohort) Page 16 11/2010 THECB Legislative Agenda: Aligning Funding with State Goals

17. Higher education must identify novel ways of doing business in a more productive manner that: achieves higher performance and better outcomes maintains a high level of quality Page 17 11/2010 THECB Legislative Agenda: Aligning Funding with State Goals Cost-Efficiency Strategies

18. Page 18 11/2010 THECB Legislative Agenda: Aligning Funding with State Goals Cost-Efficiency Strategies Create Statewide Articulation Agreements Limit Associate’s degree programs to 60 hours Require 10 percent of all hours be delivered via non-conventional methods Increase faculty productivity by 10 percent Require students to file degree plan between 30 and 36 credit hours