1. SJR 88 Higher Education Finance Study Commission November 10, 2010

2. Context: The Illinois Public Agenda There are two states of Illinois, and overcoming the divide is a moral and economic imperative Illinois is experiencing economic stagnation Students underrepresented in higher education are the demographic drivers of Illinois future About 41% of Illinois working population currently has an associates degree or higher Labor economists project that over 60% of jobs will require a postsecondary credential by 2018 To reach 60% of its working population holding a postsecondary credential by 2025, Illinois needs to award some 600,000 more credentials than it would on its current trajectory – about 4,400 more each year than the previous year 2

3. Your Comments... URGENCY – Illinois is falling behind! Connect funding to attainment goals Public benefits of higher education – develop citizens Need for increased state support to meet goals Quality – maintain and measure it Need to serve more students Address unfunded mandates and procurement Address preparation at the K-12 level – coordinate! Efficiency – focus resources on core missions and encourage administrative efficiency Timeline for development and deployment 3

4. Findings Illinois higher education finance policy is not tied to the goals of the Public Agenda State support for higher education in Illinois has declined, and tuition has increased to fill the gap Illinois community colleges lag behind the national average in E&G spending per student Illinois is a low resource/high production state, but the attainment goals of the Public Agenda cant be met by efficiency alone Performance-based funding is a viable policy tool to achieve improved outcomes 4

5. Findings Performance-based funding must be developed through a consultative process Performance-based funding models must be tailored to each sector of higher education Performance-based funding must encourage at-risk students to complete a certificate or degree Illinois financial aid philosophy is on target, but MAP is underfunded Illinois most vulnerable students are at risk – particularly late filers who intend to attend community college MAP doesnt connect access to success 5

6. Recommendations Illinois must address its fiscal situation to ensure adequate, predictable, and stable funding for higher education Unfunded mandates and laws that impede efficient college and university operations should be eliminated Further efforts to identify and implement operating efficiencies within and between institutions must be undertaken at the institutional and state levels Both instructional and administrative efficiencies need to be pursued 6

7. Recommendations Illinois should develop a performance-based funding system that incorporates all of the following characteristics: Recognizes additional costs of serving at-risk students Differentiates between institutional missions Ties state funds to certificate and degree completion and achievement of momentum points Includes measures of quality so that performance, quality, and efficiency are all considered in funding decisions 7

8. Recommendations Illinois should consider changes to MAP given the inability of the program to meet current needs: MAP needs additional state resources Additional resources may be available through the Human Capital Development proposal Innovative arrangements such as 2+2 programs should be developed and implemented Consider a shared responsibility model that includes federal tax credits and higher assumed student contribution Encourage or require MAP recipients who are recent high school graduates to take a college-ready curriculum 8