Improving Education Quality in the Era of Outcomes-Based Funding
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Improving Education Quality in the Era of Outcomes-Based Funding

While performance-based funding may seem like a good idea at the outset, it leads to a risk of higher education institutions transforming into diploma mills for the sake of additional funding.

In what appears to be the next wave, 16 states have adopted, or are moving toward adopting, “outcomes-based funding,” through which a portion of state appropriations to public colleges and universities is allocated on the basis of the schools achieving certain metrics. The outcomes most emphasized revolve around graduation rates.

The reason for this growing movement, as well as its focus on graduation rates, is easy to understand. About half of the entering college students never graduate. Most who succeed in completing their degrees take longer than four years to do so, which increases the cost of a degree both for students and for taxpayers, who subsidize public and private higher education. Those who fail to graduate often leave burdened with student-loan debt, which, because they lack a degree, they find harder to repay. Total student-loan debt stands at nearly one trillion dollars, which, for the first time in history, is more than credit-card debt nationwide. A New York Times piece on the subject notes that, in some circles, student-loan debt has come to be labeled, “the anti-dowry.”

While understandable, there is also a danger to focusing outcomes-based funding solely or primarily on graduation rates, completion rates, etc. It threatens to devalue college degrees. In the rush to increase the quantity of graduates, there is an inevitable risk that education quality might decline.

Such a decline would only worsen the documented crisis in student learning: in 2011, Academically Adrift, the landmark national study of student learning, was published. The report tracked 2,300 students from a variety of colleges nationwide to gauge student habits, attitudes, as well as how much they learned during their college years (Fall 2005-Spring 2009).  The results are alarming. Using the Collegiate Learning Assessment (CLA) to measure what this cohort learned while in college, the study discovered that 36 percent of students surveyed demonstrated only “small or empirically non-existent” gains in fundamental academic skills — critical thinking, complex reasoning and writing — after four years of college. Academically Adrift found a number of factors contributed to these poor results. Since the early ’60s, student study time has dropped on average from 24 to 14 hours per week. Worse, college professors are awarding these lower-effort students ever-higher grades. Fifty years ago, roughly 15 percent of all college grades given were As. Today, 43 percent of college grades are As. Remarkably, studies show an A is the most common grade given in college today.

The fact that we are failing to educate 36 percent of our students should give us pause before we rush to graduation rate-focused outcomes-based funding. This is not to deny the need to increase graduation rates — far from it; the unsetting graduation statistics cited above attest to this need. It is, instead, to insist that student learning (which is, after all, the central mission of higher education) be included as at least an equal partner with graduation and completion rates when weighting the metrics composing outcomes-based funding formulas. In business, initiatives to increase productivity are always accompanied by quality-control measures, and rightly so. It should be no different in higher education; in fact, we suffer more as a people from devalued education than we do from this or that shabbily-constructed product. Decoupled from an external measure of quality control, such as the CLA, inflating graduation rates threatens only to further deflate the already-dubious value of too many college degrees. We do not want to simply hike the number of students with degrees but not the academic excellence a degree is meant to certify.

How to address this concern? Legislators in Texas think they may have the answer. While the state considers increasing the role of graduation rates in outcomes-based funding formulas, there is also a bill in the Texas Senate (SB 436, sponsored by Sen. Brian Birdwell) that would require public colleges and universities to administer the CLA to all students during their freshman and senior years. The schools would also be required to publish the results, broken down by academic majors. The bill focuses on transparency in student-learning outcomes as the first step toward raising public awareness about areas of academic strength and weakness in certain schools as well as majors. This would help universities to be better able to shore up poor-performing areas as well as to trumpet the merits of strong fields. It would simultaneously guide prospective students toward schools and majors shown to yield significant increases in learning.

In looking to marry efforts to improve graduation rates with a no-less-serious initiative to improve student learning, Texas may well emerge as a national model on how to do justice to both quantity and quality in higher education.

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3 Responses to Improving Education Quality in the Era of Outcomes-Based Funding

  1. Meghan M Reply

    2013/04/05 at 9:17 am

    It’s encouraging that states like Texas are starting to recognize the need to balance improving graduation rates with maintaining certain standards in education delivery. I will be closely following the developments of SB 436, hoping other states soon follow.

  2. Alex Tyrer Reply

    2013/04/05 at 11:37 am

    Administering the CLA for students in their freshman year and, later on, before they graduate, is a good way to measure their learning. However, it’s also a reactive rather than proactive move. If indeed students are demonstrating on their CLAs in senior year that they haven’t learned as much as they should have, it’s already too late to correct any issues. Perhaps the CLAs can be administered in a student’s third year, with time for the school to address any shortcomings before the student leaves, degree in hand, woefully underprepared for the job market.

  3. Andrew Morris Reply

    2013/04/05 at 3:03 pm

    Performance-based funding presents a catch-22 for the higher education industry. By punishing schools that are underperforming, you increase the likelihood that, during the next assessment cycle, they will again perform poorly. At the same time, it would be difficult to justify providing additional funding for schools that do not meet performance measurements. There’s no easy answer on how to deal with this challenge, but it serves as a caution to schools and to funding and/or accrediting bodies that performance-based funding is not without its issues.

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