Tennessee higher education officials are debating a change to the way colleges earn state funding, and a new method could bring financial repercussions to some struggling schools.
"We want to have the finances reflect school behavior and support schools that are doing what they should be doing," said Russ Deaton, director of fiscal policy and facilities analysis at the Tennessee Higher Education Commission. "There will be more financial consequences."
The current amount of state funding received by a college or university is based mostly on the number and mixture of students it enrolls, Mr. Deaton said. However, officials are considering a revamped funding formula that divvies out state dollars based mostly on graduation rates.
Although graduation and retention rates would be a larger part of a new funding model, Mr. Deaton said, some incentives already are embedded in the current formula.
For instance, schools are paid more for retaining students from freshman to senior year, and campuses can add about 5 percent onto their appropriations for improved graduation rates, he said.
Also, schools can increase their funding by enrolling certain types of students. It costs more to train a doctoral degree candidate in physics or an undergraduate student in engineering, Mr. Deaton said, so students enrolled in many of the science, technology and health-related fields are weighted more than a freshman student studying English, he said.
Funding also is affected by the physical size of the campus and utility usage, Mr. Deaton said.
Richard Brown, vice chancellor for finance and operations at UTC, said he is unsure how the Chattanooga campus will fare if the THEC funding model is changed. He said it is too early to say whether it would positively or negatively affect the university's state appropriations.
"It is all too tentative," he said.
This year, the University of Tennessee at Chattanooga received $47.7 million in state appropriations, or 43.8 percent of its budget, documents show.
The school has grown enrollment by 18 percent to nearly 10,000 in the last eight years, but its graduation rate -- 42 percent -- is lowest in the UT system.
THEC will convene a formula review committee that will meet over the next six months to retool the existing funding model and the results will likely be presented in January when the commission releases its new master plan for higher education, Mr. Deaton said.
"The schools who will do well (with the new funding formula) are schools that are graduating more people, who are retaining their students, who are going after adult students, who are doing the things that state wants them to do," he said. "Enrollments are an important component, but over time you have seen Tennessee move further toward outcome-based (funding)."
With the national economy in freefall, Tennessee has fewer dollars to pass on to colleges and universities. So Gov. Phil Bredesen and some legislators are pushing for smarter spending.
At the same time, Gov. Bredesen and lawmakers on the state Senate Education Committee want higher education officials to be accountable for the money the state can contribute to colleges, especially when it comes to graduation rates.
Tennessee now is ranked as having the 44th worst average graduation rate in the nation -- 45 percent.
"This is something that we have been studying for several years," Mr. Deaton said. "But the fact that the governor and legislators are interested in it is a good thing. ... We would be doing this anyway, because it is a right thing from a policy standpoint."
The state's new higher education funding model could more closely resemble those in states such as Ohio and Washington, he said, which weigh performance heavily in the funding equation.
"This is something that is en vogue right now," he said.
Joan Garrett McClane has been a staff writer for the Times Free Press since August 2007. Before becoming a general assignment writer for the paper, she wrote about business, higher education and the court systems. She grew up the oldest of five sisters near Birmingham, Ala., and graduated with a master's and bachelor's degrees in journalism from the University of Alabama. Before landing her first full-time job as a reporter at the Times Free Press, ...
This seems like an easy to manipulate funding system. If a college wants more funding, all they must do is lower their grading standards. Stated more simply, all they must do is pass students who do not deserve to pass. They could receive more funding, but hurt the state by actually lowering our education level. I can see a funding model such as this being effective only if there were added criteria such as examining employment rates after graduation. Our state seems to be focusing on results based planning by schools, but it is failing to examine a wide enough range of criteria to properly construe the results. As stated above, I believe that employment rates and success outside of the academic setting would need to be factored in to make a true determination of how well the school is functioning in educating our populace.
This same policy is similar to the current entrance examination at UTC for Math and English. The school will look at the ACT score or the entrance exam score and make a determination about what level math or English class the student may enroll in. The school believes that two standardized tests are the only way to determine whether a student is prepared for math or English. This narrow view fails to account for those students who stress out and/or have drastic test anxiety. Additional criteria such as high school math or English GPA's which are more indicative of overall performance are ignored. Students who should be in a higher level Math or English class are forced to take classes that do not count for graduation and our student's and our state's resources are wasted.
The state is trying to raise the quality of life for students by educating them. It is also trying to improve the quality of life for our citizens by creating a highly educated work force which studies have proven will increase the quality of life for every citizen by spurring economic growth. Unfortunately the state programs focus too narrowly on specific criteria and fail to account for other variables. This ends up resulting in the opposite of what they intend. With the math and English testing system, they may help some students, but they hold back others. We waste resources forcing them to rehash things they already know. With the funding plan discussed in this news article, we give funding based on attrition and retention of students within the school. The program fails to examine how those students perform once they leave the academic setting. By doing this, the school can simply lower their grading standards and send these people into the work force ill prepared to perform their jobs. Not only have we wasted state funding on these people, but we would also grant more funding the next year for more of the same. The state has quite simply become too focused on a narrow set of criteria.
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