Indiana To Base Larger Portion Of College Funding On Performance

Kyle Stokes / StateImpact Indiana

Teresa Lubbers (center), Indiana's Commissioner for Higher Education, speaks on a panel in Indianapolis on Thursday, December 1. The panel was organized by NPR and the Lumina Foundation, an Indianapolis-based foundation focused on higher education policy.

The pool of state money available to Indiana colleges who show the highest performance on state-assigned metrics is set to get bigger.

Commissioner for Higher Education Teresa Lubbers says a state panel will consider expanding the amount of money distributed to public colleges and universities under Indiana’s performance funding formula.

The formula has, in part, spurred Indiana’s colleges to re-evaluate curricula and courses — and also raised concerns over the metrics used to distribute the money, which leaves some schools hurting financially more than others.

Currently, 5 percent of the state’s $1.2 billion higher education budget — roughly $61 million — is distributed based on performance metrics, such as how many of a school’s students graduate on time (among others).

If approved, Lubbers says new guidelines would bump that figure up to 6 percent. Based on current appropriations, that would increase the amount of performance formula funding by at least $10 million. Lubbers says she hopes that figure will gradually increase a few percentage points in the next few years.

Compared with previous years, where the state based 1 or 2 percent of its funding formula on performance measures, “we’re starting to talk about real money now,” Lubbers says.

She says the Commission for Higher Education will review a proposal to adjust the performance metrics and funding levels at its December 9 meeting. Lubbers acknowledges there is still room for debate over the criteria the state uses to measure performance.

“We’re in the process of refining those metrics. The challenge is to bring stability to the [performance funding] formula when you want to bring about change,” Lubbers says.

Lubbers was speaking on a panel convened by NPR and the Lumina Foundation, an Indianapolis-based foundation focused on higher education policy.

Changes to the performance funding formula have had widespread effects, even though the funding amount is only a fraction of the state’s overall higher education appropriation.

Earlier this week, we wrote about how Purdue’s efforts to redesign foundational courses could have a direct impact on the school’s performance funding.

Ball State University administrators have been especially critical of the performance funding formula. The school saw its state appropriation decline by more than $11 million this year, and President Jo Ann Gora has, in part, has laid blame on the performance funding formula.

IU Bloomington’s chapter of the American Association of University Professors also released a report this fall urging the state to reconsider its stance on expanding the performance funding formula:

Is it true that every campus has an equal opportunity to increase its graduation rate? … It seems that those who believe this to be true do not recognize the possibility that some campuses are already doing well in this regard, while others are not. This is not simply a question of whether the current graduation rate is high or low, but whether it is high or low relative to the expected rate given campus characteristics. Comparing the actual rate to the expected rate would provide an alternative framework within which to judge performance.