Board OKs metrics of university funds
Focus on finishers, not enrollment
The Arkansas Higher Education Coordinating Board gave the first approval Monday to the metrics behind a new way for the state to fund its public colleges and universities.
Legislators passed into law earlier this year the change in funding, which will start July 1, 2018. The law — Act 148 of 2017 — provided a general framework for the new funding method, which changes the focus from one based largely on enrollment to one based on student success.
The state Department of Higher Education will use the metrics approved Monday to tally up a score that, with certain adjustments, will become the school’s “productivity index.” Higher Education Department staff will then use the index to determine whether a college or university improved from one year to the next and whether the institution would get less, more or the same amount of funding from the state.
The Higher Education
Department will recommend in July how to distribute funds for the 2018-19 academic year based on the new method. From there, both Monday’s metrics and the distribution policies will go through a 30day public comment period, and the department will make any necessary adjustments. The policies will then go to the joint legislative Higher Education Subcommittee and the Rules Committee before coming back to the coordinating board for final approval.
The metrics cap off a year-and-a-half’s work by a funding workgroup — led by Henderson State University President Glen Jones — that focused on putting the pieces together starting in October 2015, said department Director Maria Markham. That same month, the coordinating board approved the state’s higher education master plan, which seeks to raise the state’s graduation rate, increase enrollment of adult students ages 25 to 54, close attainment gaps and improve college affordability.
Arkansas currently ranks 45th in the nation in the percentage of adults who hold “high-quality certificates” or higher, according to the Lumina Foundation, a private group working to increase the number of Americans who hold certificates or degrees. Data show that 39.5 percent of adult Arkansans have that level of education, while the state that’s lowest in the nation — West Virginia — has a 32.9 percent rate.
The state’s higher-education master plan aims to raise its percentage of adult Arkansans who have technical certificates, associate degrees, bachelor’s degrees or higher to 60 percent by 2025.
A better-educated population can attract businesses and industry to the state, officials have said.
The new funding method — backed by Gov. Asa Hutchinson, who pledged $10 million more in higher education money from the state — is aligned with the state’s goals in the master plan, Markham said.
Colleges and universities are funded by three main sources: tuition and fee revenue, state appropriations and donations.
Under the metric policy, Arkansas’ 10 public universities and 22 public community colleges would be measured over four broad domains: effectiveness, or having the right initiatives in place; affordability, controlling rising student costs; efficiency, doing things right; and adjustments.
The effectiveness domain would account for 80 percent of an institution’s score, and affordability would take up the remaining 20 percent.
The heaviest measure is for credentials, which is 40 percent of the effectiveness domain. Credentials include certificates of proficiency, technical certificates, advanced certificates, associate degrees, bachelor’s degrees, master’s degrees and doctoral degrees. The credentials measure would earn more points for institutions if students’ degrees are in science, technology, engineering or mathematics or if it’s in a “high-demand” field.
The metric would also be weighted on the students themselves. Black and Hispanic students, for example, would have a greater weighting than a student of a different race or ethnicity because they don’t graduate at the same rate as other groups. Adult students ages 25 to 54 would also have greater weighting, along with students who are eligible for the federal Pell grant and those who need non-credit remedial education. The Pell grant does not need to be repaid and is reserved for low-income students.
The next heaviest measure is for progression, which is 30 percent of the effectiveness domain. Progression captures students continuing on from year to year to graduate. Colleges would earn a point each time a student reaches 15 credit hours, 30 credit hours and 45 credit hours. Universities would also count 60 and 90 credit hour markers. This measure is also compounded by student characteristics.
Transfer students and gateway-course success
each make up 15 percent of the effectiveness measure.
Two-year colleges would earn a point for students who transfer from there to a four-year school with 30 credit hours from the Arkansas Course Transfer System, a set of mostly general-education classes, said Marla Strecker, senior associate director of the Higher Education Department. Two-year schools would earn 1.25 points per student who transfer from their school to a four-year institution with an associate’s degree.
Only when the transfer students earn a bachelor’s degree does the four-year institution earn credit, under the proposed policy.
The last 15 percent is for students’ success in gateway courses, typically in math, English and reading.
“Nationally, for decades, gateway courses were called … gatekeeper courses because they were stumbling blocks to students progressing,” Strecker said. “Once a student is able to progress past those, a student has more likelihood to complete a credential.”
As an example, a gateway course in English is composition 1, and one in math may be college algebra or statistics. Institutions would earn a point for each student who earns a letter grade A through C in the gateway courses. Students who were in need of remedial coursework would be weighted more heavily.
The group came up with two metrics under affordability, both 50 percent of the domain: time to degree and credits at completion. Students who finish “on time” with the amount of credits they need to graduate in their major would have less debt, higher education leaders have said.
Schools would earn one point for students who graduate “on time,” which is two years for an associate’s degree and four years for a bachelor’s degree. Students aiming for an associate’s degree who graduate any time more than two years to two-and-a-half years would have less of a weighting for the institution, along with students aiming for a bachelor’s degree who graduate any time more than four years but within five years.
Similarly, schools would earn one point for students who finish an associate’s degree with 60 credit hours or a bachelor’s degree with 120 credit hours. Students who have 66 credit hours for an associate’s degree or 132 credit hours for a bachelor’s degree would have less of a weighting as well.
The Higher Education Department would make adjustments for certain degree programs that for licensure or accreditation reasons, such as nursing, require more than the standard amount of credit hours, Strecker said.
To calculate an institution’s score, the Department will add points from both the effectiveness and affordability domains. It will then make adjustments based on research for fouryear universities and for “diseconomies of scale” for two-year colleges that serve rural areas.
The research adjustment only applies to the public universities whose research expenditures are more than 5 percent of its total expenditures. Only four universities — the University
of Arkansas, Fayetteville; Arkansas State University; the University of Arkansas at Little Rock; and the University of Arkansas at Pine Bluff — would have the adjustment, which would increase scores by the threeyear average percentage of research expenditures, said Tara Smith, the department’s deputy director.
For two-year colleges, the department would take a three-year average of all public community college enrollment. Community colleges could earn 3 to 5 percent more in its scores if its headcount falls below that average, Smith said.
The department would also make adjustments in a school’s score with the efficiency domain, which can add or subtract 2 percent to a score. The efficiency domain is made up of a core-expense ratio, which measures how much each school spends on its core operations — including instruction, academic support and student services — of its total institutional support expenses, and of the faculty-to-administration salary ratio, which measures how much each school spends on instructional salaries of its total institutional support salaries.
The ratios would be compared with a cluster of similar schools in the 16-member Southern Regional Education Board. The additions or detractions would depend on how close or far an Arkansas college or university was to the average of their peers in the regional board.
A school would know its final score after both the adjustment and efficiency domains.
“If you all find, or the institutions find … that something is not working the way that it’s intended to, then there’s a way, there’s a mechanism built in to change it?” asked coordinating board chairman Sherrel Johnson.
The law calls for the Higher Education Department to review the metrics every five years, Markham said, but should there be any unintended consequences, such as institutions raising academic requirements or lowering academic quality, the department will review measures immediately.
No one at the coordinating board meeting Monday spoke for or against the metrics, though Arkansas Northeastern College President Jim Shemwell — who could not attend the meeting because of a college-related appointment overseas — wrote a letter to the board, raising seven challenges to the new model and offering solutions for each. Markham responded to each, mostly backing the workgroup’s plan.
The challenges Shemwell raised ranged from no post-graduation metric — the department is working to collect this data — to the absence of a cost measure for high-demand technical education and the omission of certificates in the affordability domain. He recommended awarding “time to degree” points for technical certificates completed in 36 or fewer hours, for example.
There is no standard time to earn a certificate, Markham said, and establishing a threshold would be arbitrary. The 36-credit hour mark, she said, would not include students vying to become a licensed practical nurse.