How Performance Funding Might Reshape Higher Education In Alabama
At the same time the University of Alabama was touting its record $3.4 billion economic and fiscal impact on the State of Alabama, some Alabama lawmakers were considering legislation that would measure state funding for higher education on an outcomes metric. The new methodology would measure funding based on how well universities prepare students for success after graduation.
It's called performance or outcomes-based funding and the Joint Legislative Study Committee on Higher Education Funding is studying it as a way to "modernize" state funding for higher education. The metrics could include attaining goals or ones geared toward a particular priority of the state, such as workforce goals.
“We want to have some input and give them the resources, give them the money to make that happen,” said Sen. Arthur Orr (R-Decatur) during this week's meeting at the State House.
With both the University of Alabama, Auburn and other state schools recording record enrollments the new state funding formula would be designed to incentivize institutions to prioritize student success over enrollment figures by increased retention and completion efforts.
Outcome-based funding would allow the state to set benchmarks for colleges and universities to meet, such as job retention for graduates, and then the schools would receive appropriate funding in return.
"I think it's probably a good idea," says West Alabama State Rep. Bill Lamb (R-62). "If we can get a good handle on the needs of the state workforce and match it with the individual school curriculums it might make higher education funding match state needs."
The UA graduate and former chief financial officer for Tuscaloosa County would like to see the final legislation once it is developed before commenting further either way.
Outcomes based funding is already being used in Kentucky, Tennessee, Texas and in various forms in eight other states. The idea comes as a facilities arms race has prompted colleges and universities to raise million for construction.
Critics worry that performance-based funding could result in lower admission acceptance rates in order to achieve funding metrics. They claim it could specifically reduce access to higher education for minorities and students from rural areas. Performance based funding may also place more pressure on community colleges in preparing students for admission to 4-year schools.
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