Arkansas’ higher education institutions face a paradox. The colleges and universities have a funding formula that works but need new or additional money to make the formula work as designed.
We can’t resolve the “issue of equity” among institutions without providing them additional money, one higher educational official noted. The Arkansas Higher Education Coordinating Board last week recommended a $63.5 million increase in funding for colleges and universities shortly after Gov. Mike Beebe told the group not to expect an increase with current revenue forecasts. The board also endorsed Beebe’s “performance funding” amendment to the state’s higher-education funding formula. Performance funding would financially penalize institutions that don’t show improvements in a number of areas, including graduation rates. Colleges and universities would be required to “earn back” a portion of their state funding by showing improvement in several areas under Act 1203 of 2011, which calls for the formula to determine 5 percent of an institution’s state aid in the 2013-14 school year.
That amount will increase by 5 percentage points each year until the 2017-18 school year, when the formula will determine 25 percent of state funding to higher-education institutions by measuring growth in 10 factors.
The formula will include four mandatory levels, including the number of bachelor’s degrees awarded, number of credentials awarded in science and technology fields, the number of overall degrees and certificates awarded and a “progression” model that tracks how many students who enroll in at least six credit hours in their first semester have earned at least 18 credit hours within two academic years. Each university will select the remaining six factors for its campus from a list of options, which include graduation rates for low-income students.
Two-year colleges include six similar mandatory levels and seven optional measures, which include transfer rates and the number of students who find jobs after graduating.
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Beebe supported performance funding as part of his efforts to double the number of college graduates in Arkansas by 2025. The state ranks second from the bottom in degree-holding adults during the latter half of the decade.
While Arkansas’ admission rates are on par with the Southern region, many students enrolled in the state’s schools in the past have yet to obtain a degree.
Less than 38 percent of the 11,500 state students entering Arkansas’ public universities for the first time in 2004 had earned a degree six years later.
Almost 19 percent of the state’s residents older than 25 hold bachelor’s degrees. The number is well below the national average of 27.5 percent. West Virginia, with 17.1 percent, was in last place, replacing Mississippi on any list where we are near the bottom.
How do we send a strong signal to lawmakers that our institutions are not adequately funded if we follow the performance funding plan? Doing nothing translates into even lower degree-holding numbers.
The $63.5 million recommended by the board represents the amount necessary to fund each college and university at 75 percent of its need as determined by a state-approved formula. University and college officials wonder how the state can hold their institutions to higher performance standards without increasing state funding that has been flat for several years.
Without an increase in higher education funding, no universities and only two community colleges would be fully funded under that same state formula. State higher-education funding would remain at its current level of $594 million in Beebe’s budget proposal for fiscal year 2013, which begins July 1.
Only a modest increase for kindergarten-through-12th-grade public education is anticipated. The Arkansas Constitution requires the General Assembly fully fund the court-approved adequacy formula for public schools before distributing other state revenues.
Without a big improvement in the economy, the only options available to colleges and universities involve increasing student tuition and fees.