SJR 88 Higher Education Finance Study Commission

1. SJR 88 Higher Education Finance Study Commission November 10, 2010

2. Context: The Illinois Public Agenda • There are two states of Illinois, and overcoming the divide is a moral and economic imperative • Illinois is experiencing economic stagnation • Students underrepresented in higher education are the demographic drivers of Illinois’ future • About 41% of Illinois’ working population currently has an associate’s degree or higher • Labor economists project that over 60% of jobs will require a postsecondary credential by 2018 • To reach 60% of its working population holding a postsecondary credential by 2025, Illinois needs to award some 600,000 more credentials than it would on its current trajectory – about 4,400 more each year than the previous year

3. Your Comments . . . • URGENCY – Illinois is falling behind! • Connect funding to attainment goals • Public benefits of higher education – develop citizens • Need for increased state support to meet goals • Quality – maintain and measure it • Need to serve more students • Address unfunded mandates and procurement • Address preparation at the K-12 level – coordinate! • Efficiency – focus resources on core missions and encourage administrative efficiency • Timeline for development and deployment

4. Findings • Illinois’ higher education finance policy is not tied to the goals of the Public Agenda • State support for higher education in Illinois has declined, and tuition has increased to fill the gap • Illinois community colleges lag behind the national average in E&G spending per student • Illinois is a low resource/high production state, but the attainment goals of the Public Agenda can’t be met by efficiency alone • Performance-based funding is a viable policy tool to achieve improved outcomes

5. Findings • Performance-based funding must be developed through a consultative process • Performance-based funding models must be tailored to each sector of higher education • Performance-based funding must encourage at-risk students to complete a certificate or degree • Illinois’ financial aid philosophy is on target, but MAP is underfunded • Illinois’ most vulnerable students are at risk – particularly late filers who intend to attend community college • MAP doesn’t connect access to success

6. Recommendations • Illinois must address its fiscal situation to ensure adequate, predictable, and stable funding for higher education • Unfunded mandates and laws that impede efficient college and university operations should be eliminated • Further efforts to identify and implement operating efficiencies within and between institutions must be undertaken at the institutional and state levels • Both instructional and administrative efficiencies need to be pursued

7. Recommendations • Illinois should develop a performance-based funding system that incorporates all of the following characteristics: • Recognizes additional costs of serving at-risk students • Differentiates between institutional missions • Ties state funds to certificate and degree completion and achievement of momentum points • Includes measures of quality so that performance, quality, and efficiency are all considered in funding decisions

8. Recommendations • Illinois should consider changes to MAP given the inability of the program to meet current needs: • MAP needs additional state resources • Additional resources may be available through the Human Capital Development proposal • Innovative arrangements such as 2+2 programs should be developed and implemented • Consider a “shared responsibility” model that includes federal tax credits and higher assumed student contribution • Encourage or require MAP recipients who are recent high school graduates to take a college-ready curriculum