Indiana higher education commission fields tough funding questions from state budget panel

Indiana’s higher education officials on Wednesday faced tough questions about a draft post-secondary funding model and proposed plans to increase the number of Hoosiers with post-high school credentials.

That was during a state budget committee meeting at the Statehouse, where representatives from the Indiana Commission for Higher Education (ICHE) outlined their biennial budget recommendations.

Indiana’s state budget operates in two-year periods. The General Assembly drafts the budget in odd-numbered years, meaning that expenditures must be accounted for in two-year segments. 

ICHE officials last month approved recommendations for a new approach to funding higher education that is based on school-specific goals, rather than blanket recommendations. The General Assembly tasked the commission with researching a new formula to cover costs at Indiana’s state colleges and universities.

But some lawmakers on the state budget panel raised concerns about the recommendations, saying the higher education commission should develop a more specific and strategic plan to meet the governor’s goal of having at least 60% of adult Hoosiers with a quality degree or credential beyond high school by 2025. Currently, that number is just over 48%, leaving a majority of Hoosier adults without a credential beyond a high school diploma.

Sen. Liz Brown, R-Fort Wayne, additionally said the plan could unfairly shift the burden of improving some metrics — like Indiana’s dismal college-going rate — to institutions of higher education instead of K12 schools. 

In recent months, members of the ICHE’s own board said they also had hesitations about the new outcomes-based funding model, cautioning that it lacks clear goals for the state’s public colleges and universities.

The state’s largest public postsecondary institution is pushing back, too, maintaining that recent progress made by the school won’t be rewarded, which could mean millions of dollars are no longer guaranteed.

Where should new funding go?

Indiana Commissioner for Higher Education Chris Lowery on Wednesday pointed to decreased state support, per-student, in recent years. Even so, when adjusted for inflation, Indiana’s public college tuition and fees have decreased 4% over the past five years — a larger decrease than the national average.

Now, ICHE’s primary requests center around operational increases for each of the state’s public colleges and universities, including base funding boosts and performance-based incentives. The commission is also asking the state to greenlight funding for one capital project at each institution, totaling about $476 million over the biennium.

“Our public and private institutions are pretty good at attracting students from out-of-state — we have the ability to attract talent,” Lowery said. “But we have a problem with the talent pipeline.”

Sen. Ryan Mishler, R-Bremen, questioned why the state should increase tuition support for higher education institutions when enrollment at those schools is down, however.

Although he mostly punted the question to college presidents, Lowery said universities are continuing to struggle with increased overhead costs “that are going to be there regardless” of student enrollment numbers.

“We realize this is a significant request for investment in higher education. We believe it’s necessary for not only higher education, but for the economy of our state,” Lowery said, doubling down that increased funding is critical for “improving the state’s talent pipeline.”

Ivy Tech Community College has also spoken out against the new outcomes-based funding model.

Under the current higher education funding model, Ivy Tech stood to gain $15-17 million more annually, mostly because of “significant” increases in the number of certificates issued by the school system. She added that much of that progress has been made possible by Indiana’s Workforce Ready Grant. 

According to the new funding model, Ivy Tech currently could gain up to $14.6 million a year in the 2024 fiscal year, but not all of that money is guaranteed. That’s because the performance metrics for the prospective funding model still aren’t clear, leaving uncertainties about whether Ivy Tech’s recent progress will qualify for additional, deserved dollars.

“We support the movement towards prospective funding, but at Ivy Tech, our improvements have already been tremendous. We did the work these last few years and would hope to receive that as we move to prospective funding,” said Ivy Tech president Sue Ellspermann during the Wednesday budget committee. “We hope to see that Ivy Tech would – for the work we’ve done – would see that in our performance funding this year.”

Getting more students to go to — and stay — in college

The ICHE also laid out a proposal for its internal operations. Their recommendations include:

• $7 million to maintain and enhance three financial aid programs
• $5 million for marketing & communications, notably to launch a grassroots, statewide campaign that will “promote the value of higher education to individuals and Indiana’s economy”
• $400,000 needed to fund “new and necessary” staffing needs
• $656,000 to restore funding from 2021 cuts, which will help with increased costs from inflation and enable the agency to move personnel costs and other administrative funding off grant sources

Brown took issue with the statewide communications plan, though. She questioned why the higher education commission should be the “marketer” for all Indiana colleges and universities and maintained that high schools should be the ones responsible for pushing students to continue their education after graduation.

The senator was further critical of the commission’s “confusing … cross messaging” about credentialing that can be obtained outside of traditional two- and four-year colleges and universities. Brown said ICHE should focus less on messaging that encourages students to attend other programs for other credentials.

“I understand we need credentials, we need the workforce development and training. But that’s a lot of things to stick on the wall from your agency,” she said, adding that the state is spending “so much money” on grant programs, like 21st Century Scholars, that support student enrollment at two- and four-year schools.

“We’re washing away millions and millions and millions of dollars that we’re spending on kids hoping to go to college,” Brown continued, referring to what she called “horrible” retention rates among scholarship students at Indiana colleges.

Lowery emphasized that post-secondary schools will continue to market their own specific programs and campuses, but maintained that the commission has a duty to push all Hoosiers to earn some sort of advanced education after high school.

“Ours is to help students see the value of higher education,” Lowery said in response to questioning from Brown. “I think the General Assembly has charged us with encouraging those short-term degrees, too. We’re trying to take into account that it’s all of the above that the economy needs.”