1. StrategyLabs.LuminaFoundation.org Outcomes-Based Funding & the Student Completion Agenda Presented by: Jimmy Clarke, Ph.D. & Martha Snyder HCM Strategists, LLC December 7, 2015

2. StrategyLabs.LuminaFoundation.org 1 Supported by Lumina Foundation Open platform for leaders and influencers in all 50 states to share research and data, encourage peer learning and professional experiences to advance Goal 2025.

3. StrategyLabs.LuminaFoundation.org State Policy Agenda 2 Create Smarter Pathways Improve Student Outcomes Align Investments Attainment and Equity Goals Strategic Plans Data systems “Affordability” Need-based financial aid & design Outcomes-based funding Transfer policies Accelerated programs K-12 CCR alignment Returning Adults

4. StrategyLabs.LuminaFoundation.org Objectives Introduce non-partisan research to a broad group of state stakeholders Improve awareness of data, the needs of the state, and policy options; and Build understanding to inform adoption, enhancement and sustainability of public policies that can help improve student outcomes. 3

5. StrategyLabs.LuminaFoundation.org Support and Resources Provided Non-partisan, evidence-based policy expertise –Writing, webinars, on-site support –Speakers and discussants at meetings Convening and Facilitation –Peer learning engagements in states to share lessons, challenges –Multi-state discussions to explore ideas with researchers and experts –Meeting preparation and facilitation (board meetings, workshops) Advising Policymakers –Non-partisan testimony –Individualized briefings Research –Original data collection and analysis –Written analysis of policy alternatives and alignment to research- informed best practices –Translational research 4

6. StrategyLabs.LuminaFoundation.org ALIGNING INVESTMENTS TO SUPPORT STUDENT COMPLETION: OUTCOMES- BASED FUNDING

7. StrategyLabs.LuminaFoundation.org Policy Rationale for Performance Funding 6 Align funding method with state/system priorities Completion/Attainme nt Jobs/Economic Development Align institution priorities Support Scaling of Proven Student Success Practices Programmatic Evaluation and Change Improve Efficiency & Reward Outcomes

8. StrategyLabs.LuminaFoundation.org State Funding Models 7 Allocation based on prior levels of funding Adjusted +/- based on available funds Goal: Institutional fiscal stability Challenge: Equity in institutional funding Historic # of students enrolled at census date Recent shift to course completion Goal: expand access Challenge: Incentive on prolonged persistence/retention Enrollment Reward for reaching performance milestones or goals Completion not necessarily key objective Often ‘bonus’ (new allocation) or small % of general allocation Challenge: Sustainability and funding Early Performance Funding based on student success and completion Significant portion of general allocation to institutions (not reliant on new money-only/separate allocation) Challenge: College’s ability to respond Outcome-Based

9. StrategyLabs.LuminaFoundation.org Outcomes-Based vs. Performance-Based Funding: What’s the Difference Performance Funding: Broad set of policies linking allocation of resources to accomplishment of certain desired goals. Historically: –Often add-ons or bonuses to institution core state funding or small amounts of reallocated dollars; –Metrics: broad, contradicting, not tied to state’s completion or attainment goals (e.g., increased access, diversity in faculty higher expenditures on research) –Design: One-size fits all, vague measures, target-oriented Outcomes-Based Funding: Evolved form of performance-based funding –More explicit connection to state needs Focus on student progress and completion Closing gaps in student outcomes (at-risk students prioritized) More money at stake; part of core allocation to institutions –Refined development & modeling approaches: all institutions included with differentiation to reflect mission

10. StrategyLabs.LuminaFoundation.org Arkansas Goals & Finance Policies Goals & Priorities Support 2025 Goal of 60% attainment –Increase number of postsecondary credentials by 50% –Increase enrollment of adult students –Raise attainment rate of underserved students –Affordability/reduce time to degree Strategies –Course redesign (remedial & gateway) –Guided pathways –Student service innovations Current Funding Model Primarily enrollment + cost based Performance component based on predetermined targets (punitive) Disconnected from broader attainment and completion priorities – Does not promote wide-scale adoption of identified strategies – Limited focus on priority populations (adult and underserved) 9

11. StrategyLabs.LuminaFoundation.org Design Principles for Outcomes-Based Funding Begin with a state goal/clear policy priorities Use a simple approach All public institutions included, reflect mission Incent success of typically underrepresented students Make the money meaningful Seek Stakeholder Input Phase-in (≠ Hold Harmless) Include only measurable metrics Plan to evaluate 10

12. StrategyLabs.LuminaFoundation.org Common Measures 11 Type of MeasuresExamples Student Progression and Momentum Intermediate outcomes/key milestones important to student’s progression toward completion Remedial education success Completion of first college-level mathematics and English courses Credit accumulation (e.g. 15, 30 credit hours) Completion & Outcomes Promote certificate, degree completion, transfer Number or rate of program completers Number of transfers Job Placement Productivity & Institution Mission Promote efficiency, affordability and focusing dollars on core mission functions Degrees per 100 FTE Research Workforce Training Priority Student categories and/or degree types that are a priority for the state to meet attainment and job needs. Student focus is on progression and completion, not just access. Adult students Academically underprepared students Low-income (Pell-eligible) students Minority students STEM-H degrees Note: often reflected by providing an extra weight to progression and completion metrics

13. StrategyLabs.LuminaFoundation.org FY 2015: Implementation of Performance/Outcomes-Based Funding Models 12

14. StrategyLabs.LuminaFoundation.org Outcomes/Performance-Based Funding as % of Institution Funding Support * ND and WY formulas are based on course-completions only; no other measures such as degree completions, are used. Nevada’s formula is about 96 percent course completion, with approximately 3.8 percent distributed on degree completion and student progression measures.

15. StrategyLabs.LuminaFoundation.org Outcomes-Based Funding: Research & Impacts Focused mostly on early performance funding policies; beginning to track effect of more robust outcomes-based funding policies Research is almost entirely focused on intermediate (institutional change) impacts Limited information/ability to understand ultimate impact (scarce research) 14

16. StrategyLabs.LuminaFoundation.org Research and Impacts ⁺Change in colleges’ awareness of state priorities & own performance ⁺Reported increase in use of data in institutional planning identify student barriers align institution policies/investments ⁺Academic program improvements Academic departments: staffing and structure changes Academic delivery: program structure (remedial education) 15

17. StrategyLabs.LuminaFoundation.org Research and Impacts ⁺Student Services Registration, graduation procedures, financial aid First-year retention programs Targeted student advising, tutoring and supplemental services Job placement services ⁻Concern over ⁻Quality ⁻Instability of funding ⁻Uneven knowledge of performance funding across and within colleges 16

18. StrategyLabs.LuminaFoundation.org Considerations for Boards of Trustees in Outcomes-Based Funding Environment Focus on the Data –Student enrollment –Student progression –Student Completion –Disaggregated Support a culture of completion and success –Engage leadership on priorities –Evaluate all aspects of institutional operations –Help communicate support and engage all campus stakeholders in conversation 17

19. StrategyLabs.LuminaFoundation.org 18