Before last year, public colleges in Tennessee had a very good reason to fill classroom seats through the first couple of weeks of the term. Each institution’s share of the state appropriations for higher education was largely based on enrollment at that point in the semester.
Now, however, those colleges stand to lose state money if students don’t complete the courses they enroll in, as well as the degrees they are seeking.
Under a 2010 law, Tennessee became the first state to appropriate nearly all of the state’s tax dollars for higher education based on institutional outcomes, such as credit completions and graduation rates. That law puts the Volunteer State at the forefront of a movement to reward colleges that produce more degree holders.
Just two years into the new policy, it is already changing how colleges work to retain students and produce graduates, with several institutions overhauling their approach to remedial education, for example. And despite assurances against grade inflation or lowering standards, some faculty members are feeling the pressure to make sure their students get through the course.
“Our sense is that this fundamentally alters the way campuses serve students,” said Richard G. Rhoda, executive director of the Tennessee Higher Education Commission.
Some colleges are also beginning to see the payoff from meeting the state’s goals, but the new formula is also creating losers in terms of state dollars. Some higher-education leaders in the state fear that the legislature will be unable or unwilling to increase the overall appropriations for higher education, about $1.4-billion for the current budget. In that case, even colleges that improve could be faced with budget cuts rather than rewards for increasing their completion rates.
“If it simply becomes a reallocation model, it won’t work,” warned John G. Morgan, chancellor of the Tennessee Board of Regents.
Completion Agenda
Since the late 1970s, about half of states, including Tennessee, have passed laws to base at least a small portion of their higher-education support on performance measures. But the amount of money at stake was too little to drive a change—usually less than 5 percent of the state’s contributions to colleges.
However, the most recent economic downturn, the growing national demand for college-educated workers, and calls to make higher education more efficient and accountable are pushing state lawmakers to consider more aggressive policies to improve college attainment. Indiana, for example, has begun slowly increasing the share of state money awarded for improving completions from 5 percent of higher-education appropriations in 2011 to 7 percent in 2014. Ohio plans to award 30 percent of its state dollars for colleges based on outcomes by 2015.
In 2010, Tennessee lawmakers passed the Complete College Act, a law meant to raise the percentage of state residents with a college degree to the national average by 2025. Less than 23 percent of Tennesseans 25 years or older have a bachelor’s degree, according to the U.S. Census, compared to nearly 28 percent of the nation.
The law eliminates the state’s old system of doling out money based mostly on enrollment and instead rewards colleges based on measures that vary by the level of institution. Research universities get a greater amount of state money for grant-sponsored research and their overall graduation rates. Regional comprehensive universities are encouraged by the formula to produce more baccalaureate degrees and to accept more transfer students. Standards for community colleges include the number of associate degrees, the number of students who succeed in remedial courses, the amount of work-force training colleges provide, and the number of their students who get jobs after completing their academic program.
Moving the Needle
Campus administrators and instructors alike say the new approach has had a drastic impact on how the institutions are dealing with students. “It changed our entire planning and budgeting process,” said Richard L. Brown, chief financial officer at the University of Tennessee at Chattanooga.
In the second year of the program, Austin Peay State University, a comprehensive master’s institution, has improved the most on the state benchmarks, largely because of efforts it began before the new appropriation model.
“We were already orienting the university around the idea of success before the new formula,” said Tristan Denley, provost at the university, which enrolls more than 10,000 students on its four campuses and online.
One example of a positive change, Mr. Denley said, was eliminating traditional remedial mathematics courses and instead giving struggling students more support in credit-bearing classes. More than 70 percent of the students who would have been in noncredit classes now successfully complete the regular course. Three years ago, before the extra support was provided, just 10 percent of the students in remedial courses eventually earned credit in a regular mathematics course, he said.
Another thing that Austin Peay and some other universities are doing is to overhaul so-called gateway courses—basic courses that are required for a large percentage of freshmen or those beginning a particular program. For example, grades in Austin Peay’s pre-calculus classes have improved since students in those courses have been required to spend time learning or reviewing the content in a computer lab where they can also receive extra tutoring, Mr. Denley said.
More intensive advising and clearer pathways to degrees are two ways that the University of Tennessee’s campuses are working to improve the number of transfers they accept and successfully graduate, said Joe DiPietro, president of the system. The university system specified the 60 credits a community-college student would need to complete to enter the university as a junior in one of nearly 50 different programs.
The new drive to improve completion is also changing what some faculty members are doing in their classrooms.
Kay W. Cowan, an associate professor of reading and language arts at the University of Tennessee at Chattanooga, said instructors are being encouraged to keep track of attendance and follow up with students who miss classes. Ms. Cowan said attendance counts as part of the grade for her students, who are preparing to become teachers themselves.
“It sounds juvenile, but we just pass the roll,” she said.
The pressure to push students to completion worries other faculty members.
A big concern is that “courses will be watered down so that students will get through,” said Linda H. Marable, a professor of mathematics at Nashville State Community College.
“That’s always a concern with making teachers accountable when their students don’t pass. There’s only so much you can do. We have so many problems with transient students and students who are just here for a few classes,” she said.
Winners and Losers
Kevin D. Ragland, an associate professor of biology at Nashville State, said the number of transient students is one of the main problems with the new formula, especially for community colleges. While the benchmarks for those institutions count the number of students who earn at least 12 credits, many students go to two-year colleges for only a couple of courses, often prerequisites for a program at another college, he said.
Nashville State has been penalized the most under the new formula, losing nearly 6 percent of its state appropriations since the 2010-11 budget, according to figures from the state’s Higher Education Commission (although because of increases in salary, health insurance, and retirement costs, the college’s overall appropriation has increased during the past two years).
And under the new formula, nearly all state money is up for grabs in each budget based on meeting the benchmarks. The institutions that improve the most from year to year on their performance are meant to get a larger share of the higher-education pie. Though there are some statistical safeguards meant to limit annual changes to an increase or decrease to 2 percent, the future levels of state appropriations is a major concern. If the state doesn’t have enough cash to reward every institution that improves, then there will be little incentive to maintain high standards and a positive outlook on the program, said Mr. DiPietro, of the University of Tennessee system.
“This is all driven on the premise that if you perform then you’ll be rewarded, and allocations of money need to be there. It will be very difficult on morale if we work really hard and then the performance-based funding isn’t there,” he said.
