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Performance-based funding guidelines for state schools hard to pin down

Discussions of performance-based funding and the Governor’s call for higher graduation rates have left state schools scrambling, but according to a recent study, more than one-third of all actual graduates aren’t counted by the federal government’s current standards.

Proposed performance-based funding, like the plans suggested by the Illinois Board of Higher Education, would give more money to schools with higher graduation rates.

An blue icon with a graduation cap and tassel.
(Photo credit: Wikipedia)

But experts say that Illinois lawmakers should be careful about weighting a school’s funding too heavily on graduation rates, since accurate numbers are notoriously difficult to pin down.

So-called non-traditional students, like those who transfer schools or go to school only part time, are not counted in the official numbers even though they make up a growing segment of Illinois college students. By undercounting the actual number of graduates, schools may not receive enough funding if Illinois switches to the performance-based funding some lawmakers are pushing.

But although Illinois’s 62 percent average graduation rate is slightly higher than the national average, it’s a troubling indication of bigger problems says Patrick Callan, president of the National Center for Public Policy and Higher Education.

“The American system of education, from top to bottom, is hemorrhaging human talent,” said Callan.

Callan agrees that graduation rates are an important way of evaluating school performance, but said that states need to be careful that they’re setting up a fair way of grading schools to account for the increasing number of part time students.

He suggests Illinois follows the path of Washington, whose performance-based funding plan has set up “momentum points”–benchmarks that measure part-time  student performance.

Checking in with student progress along their college path would get universities out of the mindset of just increasing the sheer volume or kind of students they enroll.

“Quality must be protected, so the people get knowledge and skills they really need,” said Callan.

The worst thing a performance-based funding plan for schools could do is to “fail to take into account the types of students these institutions attract and enroll,” said Linda DeAngelo, assistant director for research at the Higher Education Research Institute, an organization that studies college students.

For example, certain institutions attract certain kinds of students, said Callan.

“Students who start at Northwestern start at a very different place than the students who start at Chicago State University,” said Callan.

Students who are the first of their family to attend college have a much smaller chance of actually finishing it, as do students with low GPA’s and low ACT scores.

“So a 70 percent graduation rate for one school might actually be underperforming for a school where all your students have high ACT scores and GPA’s,” said DeAngelo.

The Illinois Board of Higher Education recommends an individual scale for considering the graduation rates of each school in its proposal for performance-based funding.

But measurements other than graduation rates alone should determine how much funding schools receive. The Illinois Board of Higher Education has also proposed that schools who keep tuition costs in check should receive more funding.

“If you don’t make affordability part of the conversation, you don’t do justice to the financial realities of the people who most need to get a higher education,” said Callan.

“This has become everybody’s problem,” said Callan, “Something needs to be done or we’ll ultimately keep Illinois and the country from having the workforce we need.”

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