outcomes-based funding: overview of best practices, research & state examples
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Presented by: Martha J. Snyder, Senior Associate, HCM Strategists, LLC. North Carolina Community College Presidents July 25, 2014. Outcomes-Based Funding: Overview of Best Practices, Research & State Examples. Agenda. Lumina Strategy Labs Network Overview - PowerPoint PPT PresentationTRANSCRIPT
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OUTCOMES-BASED FUNDING: OVERVIEW OF BEST PRACTICES, RESEARCH & STATE EXAMPLES
Presented by: Martha J. Snyder, Senior Associate, HCM Strategists, LLC
North Carolina Community College PresidentsJuly 25, 2014
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Agenda
• Lumina Strategy Labs Network Overview
• Outcomes-Based Funding Status, Design Principles & Research
• Ohio Community Colleges Formula
• Next Steps for Higher Education Finance
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LUMINA STRATEGY LABS
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Strategy Labs
• Learning community• State and system-leaders, university & college
leaders, nonprofit organizations, business leaders
• Connect peers across states to share, identify and pursue solutions to improve education attainment
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Lumina State Policy Agenda & Goal 2025
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State Policy Agenda
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Create Smarter Pathways
Improve Student Outcomes
Align Investments
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OUTCOMES-BASED FUNDING
Rationale, Status, Design Principles & Research
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Policy Rationale for Performance Funding
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Align state investment with
state/system priorities
Completion/Attainment
Jobs/Economic
Development
Drive institutional behavior
Support Scaling of Proven Student
Success PracticesProgrammatic evaluation and
change
Alternative delivery models
Polic
y Ra
tiona
le fo
r 2.0
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Current Status of Outcomes-Based Funding in States (as of 3/24/14, HCM Strategists)
WA
OR
CA
AK
NV
MT
CO
OK
WI
NE
HI
ID
WY
AZ
KS
ND
IA
AR
UT
NM
TX
MN
MO
LA
SD
MS
KY
IL
MI
NY
GA
SC
VA
AL
TN
INOH
PA
FL
NC
WVDE
NJ
ME
VT NHMACT
MD
RI
Implementing (as of FY 2014)
Developed, not implemented
Interest
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Performance Funding 1.0 Flaws
• Multiple, unaligned priorities• Complicated & Burdensome• Lack of institutional consultation• One-size-fits-all• Funding challenges • Competed w/Access Agenda• Original policy supporters left
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Design Principles for Outcomes-Based Funding
Begin with a state goal/clear policy
priorities
Use a simple approach
Account for institution
differences
Incent success of typically
underrepresented students
Make the money meaningful
Seek Stakeholder Input
Phase-in (≠ Hold Harmless)
Include only measurable
metrics
Plan to evaluate
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Outcomes-Based Funding: Research & Impacts• Focused mostly on 1.0 policies; beginning to track
impact on 2.0 policies
• Research is almost entirely focused on intermediate (institutional change) impacts
• Limited information/ability to understand ultimate impact (scarce research)
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Research and Impacts
⁺ Change in colleges’ awareness of state priorities & own performance
⁺ Reported increase in use of data in institutional planning• identify student barriers• align institution policies/investments
⁺ Academic program improvements• Academic departments: staffing and structure changes• Academic delivery: program structure (remedial education)
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Research and Impacts
⁺ Student Services• Registration, graduation procedures, financial aid• First-year retention programs• Targeted student advising, tutoring and supplemental services• Job placement services
⁻ Concern over:⁻ Quality⁻ Instability of funding ⁻ Uneven knowledge of performance funding across and within colleges
(not filtering to faculty)
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Development Steps
Step 1: Establish a framework Goals & PrioritiesTimeline for development & implementationFunding amounts
Step 2: Establish Process for Stakeholder InputStep 3: Review Data and Choose Initial MetricsStep 4: Model various formula optionsStep 5: Implementation/phase-in optionsStep 6: Finalize recommendationsStep 7: Communicate
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OHIO COMMUNITY COLLEGE FORMULA
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BackgroundHigher Education Funding Commission report and House Bill 59 study charges:
At-Risk Factors
• …identify the socio-economic, demographic, academic, personal, and other factors that identify a student as being "at-risk" of academic failure….
• study the most appropriate formula weights to: “reward schools that are successful in educating non-traditional and at- risk student populations”
Success & Completion Measures
• …research the most appropriate success points and completion measures that occur during the academic career of community college students…
• Determine how funding shall be distributed among its success points, completion measures and course completion funding…
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Funding Consultation & Process
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Began meeting in March 2013• Majority of institutions represented• Included representatives from the Ohio Board of Regents, the Higher
Education Funding Commission and the Ohio Office of Budget and Management
Facilitated by the OACC and HCM Strategists• Consultation from HCM provided through Lumina Strategy Labs
Working group formed in August 2013• Developed formula framework & technical details• Recommendations presented to full consultation
Engagement of OACC Presidents• Presentation and discussion each month from September to December
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Guiding Principles of Consultation
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• Multiple models were reviewed and evaluated based on data, policy implications, and the consultation’s guiding principles:
o Hold true to the mission and priorities of community colleges including access, completion, quality, and workforce development.
o Incentivize institutions to adopt evidence-based practices to help them succeed.
o Align with state priorities and initiativeso Be simple to understand and communicateo Develop a model that is sustainable, consistent, and reliable.
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Ohio Community College Formula History, 2009-2015
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FY 2015Elimination of enrollment component
Combination of course completion (50%), success points (25%) & completion metrics (25%)At- risk or access category application
No stop loss
FY 2014 50% enrollment + 25% course completion+ 25% success points
97% stop loss
FY 2009- 2013 Primarily enrollment-based with inclusion of success points(5% to 10%)
Stop Loss (99%-96%)
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Ohio CC: FY 2015 Framework Summary
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Cost-Based Course
Comple-tion* 50%
Success Points 25%
Cost-Based Completion Milestones*
25%
*Access Categories Applied
• Adult (age 25 and over at time of enrollment)
• Low-Income, Pell Eligible
• Minority (African American, Hispanic, Native American)
All data averaged over three years
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Component 1: Cost-Based Completions
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Cost-Based Calculation• Average statewide cost based on level of course and subject
area (aggregation of CIP codes)• # of FTE who pass course * determined cost
Access category weight:15% for any student with one (or more) risk factors
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Component 2: Student Progression
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Developmental Education Success• # of Students completing developmental
education Math and enrolling in first college-level math course (1 point)
• # of Students completing developmental education English & enrolling in first college-level English course (1 point)
12 Credit Hours• # of students earning first 12
college-level credits (1 point)
24 Credit Hours• # of students earning first 24
college-level credits (1 point)
36 Credit Hours• # of students earning first 36
college-level credits (1 point)
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Component 3: Cost-Based Completions
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Associate Degree
Completions
Certificate Completions
Transfer w/12+ credit
hours
Cost-Based Model
Access Category Weights:25% for one access category
66% for two access categories150% for three access categories
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Access Categories for Course Completions
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FY 15 Access Categories: Adult - 25 and older at enrollmentLow-income - Pell-eligible (ever)
Minority: American Indian, Hispanic, African American
Policy: Focus on student background, not enrollment status (e.g. part-time, enrollment in developmental education courses)
Narrow-In: Correlation between factors & policy informed recommended final categories
Significance: How much less likely are students from these groups to complete/graduate compared to students not from group
Data run to determine significance related to graduation and course completion
Aligned with Data or Potential Proxies (9 in total)
Colleges submitted suggested populations (15 distinct categories)
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Application of Access Categories
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Hybrid model selected:o Completed FTE
• 15% add-on for students from 1 (or more) access category
o Completion Milestones• 25% add-on for students from 1 access
category• 66% add-on for students from 2 access
categories• 150% add-on for students from 3 access
categories
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STATUS & NEXT STEPS FOR OHIO
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Status of Funding Recommendations
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−Mid-Biennium Budget: Reflects OACC Recommendationso Course completionso Success Pointso Completion milestoneso Access Categories
−Stability Fundingo $3.1 million for 96% stop-loss
o If stability funding < amount needed for 96% stop-loss: amounts are proportionally reduced
o If stability funding > amount needed for 96% stop-loss: excess reverts to general fund for all community colleges
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Next Steps
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• Recommended for inclusion in FY 2016-17: 1. Short-term certificates and certificates of value
Continue to establish common definitions and data collection processes for short-term certificates (less than 1-year)
• Recommend for inclusion in FY 2016-17 funding model Certificates-of-value need further definition from the Ohio Board of
Regents
2. Academic Preparation Access Category Establish HEI reporting process for placement scores Align to Ohio Remediation Free Standards Develop crosswalks with other measures
3. Discontinue use of projected data
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NEXT STEPS FOR HIGHER EDUCATION FINANCE
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1. Investment Needs
• Financial resources necessary to reach attainment needs– Not doing more with less; doing more, differently– Expand capacity of system to serve more students successfully– Combination of state investment and focus on student outcomes– More investment in current model will not allow us to achieve
attainment needs
• Allocation across sectors – programs and degrees to reflect projected attainment and
workforce needs
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2. Advance & Support
• Data Systems– Expand capacity to include measures such as job
placement, certificates, etc.– Quality measures
• Institution support – Build capacity to evaluate performance– Share best practices for student support
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3. Evaluate & Refine
• Understand impact innovative delivery– Remedial Education Redesign– Competency-based education/PLA
• Underserved populations– Appropriate “premium” or weight for students– Identifying within context of state attainment needs
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