INDIANAPOLIS — When reform-minded state legislators start looking at how to dole out education dollars next month, the kindergarten-through-12th-grade public schools won’t be the only ones under pressure to produce results.
Indiana’s state-funded colleges and universities — including, of course, Indiana State University — will also come under scrutiny in ways they’ve never faced before.
Enrollment figures that once helped drive funding decisions will carry less weight than completion figures when the Republican-dominated Indiana General Assembly convenes in January for its biennial budget-making session.
At a recent legislative preview conference in Indianapolis, state Sen. Mike Delph, R-Carmel, said lawmakers in charge of the budget process will be less interested in how many more freshmen are showing up on college campuses and more interested in how many will leave, on tim, with a degree
Delph was talking about what Indiana Commissioner for Higher Education Teresa Lubbers and others call “performance-based funding.”
Prompting the shift is what many see as a dismal rate of college completion in Indiana and as millions of dollars in state funding wasted because of it.
In October, Indiana was named in a national report as one of the top 10 states in the nation that lost the highest amount of taxpayer money because of college dropout rates.
The report said the 50 states collectively appropriated more than $6 billion for four-year colleges and universities between 2003 and 2008 to help pay for the education of students who failed to return for a second year.
The report by the American Institutes for Research also found that states spent $1.4 billion on grants for students who didn’t start their sophomore years.
Indiana’s tally for both those items was $268 million, according to the report..
Those numbers don’t include what Delph and Lubbers said may be an even more tragic waste: The lost time and burdensome debt that students carry with them when they walk away from college.
“This is real stuff we’re talking about,” said Lubbers, who noted how college graduates earn, on average, $23,000 more a year than workers with only high-school degrees.
It’s also real stuff to state lawmakers who need to balance a state budget with a projected shortfall of $1 billion. Funding for K-12 schools and higher education take up more than half the state budget.
Delph said state colleges and universities aren’t going to get any more money: “If you can get your budget flatlined, you can consider yourself fortunate.”
Delph also issued a veiled warning at the legislative preview: Lawmakers will take a dim view of any state college or university that tries to make up a loss in state funding with tuition increases.
The Indiana Commission for Higher Education has been pushing for the shift toward performance-based funding since 2007.
In the past, the funding formula for state colleges and universities had been driven largely by enrollment figures coupled with adjustments for inflation.
But more factors are now in the formula, including credit hours completed and degrees granted on time.
Accelerating the push for performance-based funding is competition for jobs. According to a report released by the Indianapolis-based Lumina Foundation for Education, by 2018, 63 percent of all jobs will require some form of postsecondary education.
But Indiana is behind.
According to the Lumina report:
• Only 34 percent of Indiana adults have a two-year degree or beyond.
• Only 31 percent of students attending Indiana’s state colleges and universities graduate with an undergraduate degree in four years; only 55 percent graduate within 6 years.
• Only 14 percent complete a two-year degree on time at the state’s community colleges.
Knowing the shift to performance-based funding was coming, the state’s colleges and universities have responded by creating programs to encourage students to stay on course to complete their degrees.
“It’s the reason for the existence of universities,” said Nasser Paydar, chancellor of Indiana University East. “This pushes us in the right direction.”
But it’s not easy to get there.
As Indiana State University President Daniel Bradley notes, among students most at-risk for dropping out are those who come to college ill-prepared for the level of academic work expected.
In Indiana, one in four college freshmen is required to take math or language remediation courses – college courses that cost money but don’t result in credit hours earned.
What this all means in the short term, said Bradley, is that the state’s colleges and universities better do some belt-tightening soon.
“Whatever your costs are today,” said Bradley, “you’re going to have to figure out how to do it for less.”
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