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Performance Based Funding

This proposal outlines a performance based funding model for allocating funding to public colleges in Montana, incentivizing improvements in educational outputs and accountability. The model includes metrics such as undergraduate degrees awarded, retention rates, graduate degrees awarded, research expenditures, and more. Bonus points are awarded for at-risk and under-represented students.

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Performance Based Funding

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  1. Performance Based Funding Proposed MUS System Model for AY 16-17

  2. Performance Based Funding (PBF): What, Why, & Where • What: • State gov.’s allocate funding to its public colleges based on performance. • Why: • Increased incentive for higher education to: • Improve educational outputs • Build collaborative higher edu. policy environments • Become more accountable

  3. PBF in Montana • As part of an agreement between the MUS, the Governor, and the Legislature to fund and implement a tuition freeze, the MUS adopted performance-based funding following the 2013 legislative session. • Note: the 2013 legislative appropriation increased Ed Unit funding by $50M over the previous biennium • In the 2014-15 fiscal year, 5% of state appropriations ($7.5M) was distributed to campuses for increasing retention rates, as well as increasing the number of degree/certificate completers. • New PBF model for FY16 and FY17 • Perhaps 10% of the state appropriations will be awarded • FY14 the Task Force lead discussions to determine Metrics for measurement • FY15 the Task Force leading discussions to determine the formula

  4. New Revised PBF Model for FY16 and FY17Approved at the May 2014 Board of Regents Meeting

  5. New Revised PBF Model for FY16 and FY17 Performance Metrics • 2 of them are from the previous model (2014-15) and applied to all tiers of the MUS (2-year, 4-year, & research): • Undergraduate Degrees & Certificates Awarded • Annual Number of undergraduate degrees and certificates awarded. Includes two and four year degrees, as well as one-year certificates (CAS) and less than one-year certificates (16 to 29 credits, Cert of Technical Studies – CTS*) • Retention Rates • First-year students (new & transfer; full- & part-time) who return to any campus system-wide or earn a degree. • Fall to Fall retention rates for 4-year Colleges, Fall to Spring retention rates for 2-year colleges.

  6. New Revised PBF Model for FY16 and FY17 Other Doctoral Performance Metrics • Graduate Degrees & Certificates • Annual Number of graduate degrees and certificates awarded. Includes graduate level certificates, masters, 1st professional, and doctoral degrees. • Research Expenditures • Annual expenditures for research from all sources except current unrestricted funds (tuition and state support).

  7. New Revised PBF Model for FY16 and FY17 4-year Performance Metrics • Only using the system wide metrics • Undergraduate Degrees & Certificates Awarded • Fall to Fall Retention Rates

  8. New Revised PBF Model for FY16 and FY17 Other 2-year colleges Performance Metrics • Undergraduate Degrees & Certificates Awarded • Fall to Spring Retention Rate • Early College Enrollment (of high school students) • 2-year College Menu: Choose 2 of the following items. • Success in Developmental Edu. • Momentum Points – Credit Accumulation • First-time, full-time students completing 24 or more credit hours within their 1st AY. • First-time, part-time students completing 12 or more credit hours within their 1st AY. • Licensure/National Exam Pass Rates • Transfer to a 4 year MUS school

  9. Fundamentals of the Model • Metrics measured annually, with funding allocated on the basis of the most recently available data when model run in the spring. • Current year value compared to the average of the previous three years. • Each Metric is given a weight in the model. • Metrics are indexed to a standard score of 1000. Scores above 1000 indicate growth, scores below 1000 indicate a decline, and a score of exactly 1000 indicates no change. • Colleges do not directly compete with each other for the same funding.

  10. Metric Weights • Currently used for discussion. Final weight recommendation to be provided to regents for approval at May Meeting. Input is invited.

  11. Bonus Points for At-Risk & Under-Represented Students • Additional weight will be applied to students who are: • Veterans • Native Americans • Pell Recipients (not just Pell eligible) • Non-traditional Students (+25 years old) • Additional weight also awarded for Graduate Degrees Awarded • Native Americans • Students from these populations will be counted 1.5 times in the following metrics: • Undergraduate Degrees & Certificates Awarded • Retention Rates from fall to spring semester • Not early college enrollment and two year menu. • Students who fit more than one of these categories count more than once. • For example: Astudent who is a Native American veteran, counts once as a typical student, x0.5 as a Native American, and x0.5 again as a veteran.

  12. Determining the Funding Amount • Eligible amount for funding is based on three-year resident FTE average by institution. • Growth factor (amount to be determined) identifies the points needed to get full funding • Assume 1% growth factor means need 1010 points to get full funding. • Any points over 1010 just provides total eligible amount • Points below 1010 but within a pro-rated zone provides partial funding • Pro-rated zone calculated by taking standard deviation of institutions total points from the last 5 years. • Currently using a 2 standard deviation for a pro-rated zone. • Points below the pro-rated zone means total loss of eligible funding.

  13. Earning Back Lost $$$ from Previous Year • If campuses receive partial or no funding during the first year, then during the 2nd year they will: • Try to earn back the previous year’s funding • And continue to earn its funding dedicated for that current year. • Note: • Because each year’s target goal is based upon a rolling 3 year average, a campus will be trying to earn back their previous year’s funding at a different standard than the current year’s funding.

  14. The Model In Summary • Not necessarily improvement on all metrics, but an improvement overall. • Bonus points for under-represented, at-risk populations. • Can receive partial funding if goals are missed closely. • Can earn back funding lost in a previous year.

  15. Input Needed • Weights on each metric • Allowable deviation for partial funding • Growth Rate • Any other suggestions/input on model in general

  16. Going Forward • Introduce & explain to campus communities. • Board of Regents • March Meeting: • Introduction of model and explanation • May Meeting: • Seek approval

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