A new university funding model: Not bums in seats, but students who graduate



The Globe and Mail

Published Wednesday, Apr. 03 2013, 7:10 AM EDT

Last updated Wednesday, Apr. 03 2013, 7:10 AM EDT

Across the U.S. and the world, higher education and government leaders have pointed to the exceptional need for a more educated citizenry and the central role higher education can play in improving people’s future. In Tennessee, that need is acute as our state’s public policy has for a long time sought solutions to address an undereducated population and the changing workforce and job skill demands of today’s economy.

To address these challenges, Tennessee passed the Complete College Tennessee Act (CCTA) in 2010 which ushered in a comprehensive reform agenda that sought to transform public higher education through changes in academic, fiscal and administrative policies at the state and institutional level. At the centre of these reforms is the need for more Tennesseans to be better educated and trained for an evolving workforce. Central to the CCTA is a long-range plan for Tennessee higher education that establishes the direct link between the state’s economic development and its higher education system. One of the primary policy levers for addressing the state’s educational needs is a new public higher education funding formula, which allocates the entirety of institutional operating dollars on the basis of outcomes – not enrollment.

The fundamental question at issue was on what basis should government allocate taxpayer funds to public institutions. For decades, Tennessee and virtually all other states answered that question with enrollment. As institutional enrollments grew, government funding increased, irrespective of outcomes, productivity or student learning. However, as the policy imperative in Tennessee changed in the CCTA from student access to educational attainment and workforce preparedness, then the methodology by which government funded institutions needed to evolve as well.

Tennessee has done exactly that as outcomes – degrees awarded, research conducted, graduation rates, etc. – have completely replaced enrollment in the allocation of government funding.



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