2011 Faculty Conference: Performance Funding and Financial Aid Reform

1. 2011 Faculty Conference:Performance Funding and Financial Aid Reform April 29, 2011 Jason D. Dudich, Associate Commissioner and CFO

2. State General Fund Appropriation by Function Fiscal Year 2011 Source: State Budget Agency (note: includes all Higher Educ. expenditures)

3. Higher Education Appropriation (General Fund Only)

4. Total Public Postsecondary Full Time Equivalent Enrollment – All Students 2 Year FTE Compounded Annual Growth Rate – 10% 4 Year FTE Compounded Annual Growth Rate - 1.7% Source: CHE SIS Data – Data Warehouse

5. Performance Funding Formula • Established in 2003 with Research Incentive • Grown to 6 metrics used to provide performance funding to institutions • Successful Completion of Regular Credit Hours • Successful Completion of Dual Credit Hours • Degrees Attained by Low Income Students • Change in overall degrees attained • Change in degrees produced on-time • Research Growth Incentive

6. History of Performance Funding Formula ** Red font indicates a performance funding formula

8. Performance Funding Metrics • Successful Completion of Regular Credit Hours • Provides for funding to institutions based on students completing any credit hours with a D- or better at the end of the semester • Funding provides for resident and reciprocity students, both undergraduate and graduate level • The formula rewards the growth in successful completion by comparing two, 4 year averages over a 6 year period • 2007 to 2010 Actual Data • 2009 to 2012 Actual and Projected Data • Between the 2007 and 2010, on average 121,962 FTE successfully completed credit hours at all Indiana public postsecondary institutions

9. Performance Funding Metrics • Successful Completion of Dual Credit Hours • Provides for funding to institutions based on students completing specific dual credit courses with a D- or better during high school • Specific courses are based on Priority Level Dual Credit Liberal Arts courses reviewed by the Commission and the Dual Credit Advisory Board • The formula rewards the growth in dual credit completion by comparing two, 4 year averages over a 6 year period • 2007 to 2010 Actual Data • 2009 to 2012 Actual and Projected Data • Between the 2007 and 2010, on average 2,897 FTE successfully completed dual credit hours at Indiana high schools

10. Performance Funding Metrics • Degrees Attained by Low Income Students • Provides for funding to institutions based on students receiving degrees who were recipients of the Pell Grant at the time of graduation. • Institutions can be rewarded in the formula for increasing the number of low income students graduating from their institution, no time restraints • Applies to resident, undergraduate students only • The formula rewards growth by comparing the average change over 2 years for a 4 year period: • Change in degrees from 2006 to 2007 • Change in degrees from 2008 to 2009 • Between the 2006 and 2009, Pell grant recipients graduating from Indiana public postsecondary institutions grew from 3,554 to 4,020, a growth of 13.1%

11. Performance Funding Metrics • Change in Overall Degrees • Provides for funding to institutions based on students receiving bachelor or associate degrees, resident only • Institutions can be rewarded in the formula for an overall increase in degrees attained, no time restraints • The formula rewards growth by comparing the average change over 2 years for a 6 year period: • Change in degrees from 2004 to 2005 • Change in degrees from 2008 to 2009 • Between the 2004 and 2009, total bachelor and associate degrees conferred by all Indiana postsecondary institutions grew from 19,191 to 20,076, a growth of 4.6%

12. Performance Funding Metrics • Change in Degrees On-Time • Provides for funding to institutions based on students graduating in 4 or 2 years based on degree type • Institutions can be rewarded in the formula for an overall increase in the 4 or 2 year graduation rate • Applies to resident, first-time, full time, degree seeking students only • The formula rewards growth by comparing the 4 or 2 year graduation rate for 2 periods of time: • 2004 Cohort graduation rate • 2006 Cohort graduation rate • Between the 2004 and 2006 cohorts: • A decrease of 0.3% in the 4 year graduation rate • A decrease of 4.6% in the 2 year graduation rate

13. Performance Funding Metrics • Research Growth Incentive • Provides for funding to research institutions for growth in outside research funding • Currently applies to only IU Bloomington, IUPUI and PU West Lafayette • Research funding can be in the form of federal funds (non-ARRA), industrial grants and contracts, and private foundations • The formula rewards growth by comparing two, 4 year averages: • 2005 through 2008 actual average • 2009 through 2012 projected average • In 2010, research support in the funding formula accounted for $391.8 million for the 3 institutions compared to $386.8M in 2009, a growth of 1.3%.

14. Performance Funding and Student Learning Outcomes • What Performance Funding metrics impact student learning outcomes? • Performance formula provides incentives for improvement in completion by college students in numerous areas. • Improvement in completion in course work and overall degree attainment shows improvement in student learning. • Institutions can improve completion metrics in the performance formula and show improvement in student learning – IMPACT: REWARD FUNDING THROUGH FORMULA

15. State Student Financial Aid Reform • 2010 Student Aid Reform • Commission for Higher Education (CHE) and the State Student Assistance Commission of Indiana (SSACI) presented and prepared state financial aid reform recommendations. • Recommendations included: • Eligibility determinations for financial aid • GPA requirements increased above current levels • Improving data collection by CHE for all college and university students in Indiana • Wrap around services by institutions for students on state financial aid • Merge funding for state financial aid into one source • Consideration of outside financial resources when determining state financial aid

16. State Student Financial Aid Reform • 2011 General Assembly – Senate Bill 577 Financial Aid Reform • Provides for changes to major state financial aid programs • Changes in these programs include: • Provides for greater needs testing for various state financial aid programs: during enrollment, application and renewal of aid • Requires a higher GPA during high school in order to receive state financial aid, changes from 2.0 to 2.5 • Provides for a GPA minimum during college while on state financial aid, staggered based on year up to 2.5 during senior year • Allows CHE and SSACI access to student data for public, private and proprietary institutions • Allows students with an Associate degree seeking a Bachelors degree to receive a higher financial aid award if the student did not obtain an academic honors diploma

17. State Student Financial Aid Reform • Changes in these programs include (cont.): • Adjustments to the administration of state financial aid funds to allow for better administration of state resources • Requires potential state financial aid recipients to participate in academic success program while in high school in order to obtain state financial aid in college • Changes to high school GPA and eligibility requirements will take affect after June 30, 2014 • Changes to college GPA requirements will take affect after June 20, 2012 • Changes to eligibility requirements for state financial aid programs will not have an impact until 2017 at the earliest

18. Questions? Thank you!