The Commonwealth of Pennsylvania is currently evaluating a significant shift in how it funds state-related universities, including Penn State, Temple University, and the University of Pittsburgh. A newly formed Performance-Based Funding Council, consisting of lawmakers, university administrators, and the Interim Acting Secretary of Education Angela Fitterer, is tasked with creating a funding formula that ties public funding to performance metrics. This proposed change aligns with the broader nationwide trend of tying educational finance to measurable outcomes. The transition to performance-based funding aims to enhance accountability, encourage efficiency, and ultimately improve educational results. Although Lincoln University, a historically Black college, is not affected, the council’s deliberations are nonetheless poised to shape the higher education landscape in Pennsylvania significantly.
Performance-Based Funding: A New Paradigm for Pennsylvania
Current Legislative Process and Its Flaws
Currently, Pennsylvania allocates its higher education funds based on a two-thirds legislative vote, often leading to significant delays and budget unpredictability for universities. The proposed performance-based funding model would streamline this process by requiring just a simple majority to allocate funds. This change is expected to facilitate more timely and predictable budgeting, which university administrators argue is crucial for planning and operational efficiency. Lawmakers are optimistic that this new method will not only expedite the funding process but also enhance the allocation’s precision by tying it to specific, measurable outcomes.
One major objective of the Performance-Based Funding Council is to develop a fair and comprehensive formula that takes into account diverse performance metrics. More than 30 other states in the U.S. have already adopted performance-based models, typically linking about 10% of their funding to metrics such as graduation rates, retention, and degree completion. However, formulating a one-size-fits-all solution remains a complex challenge. Experts like Charles Ansell from Complete College America and Justin Ortagus from the University of Florida have highlighted a “Catch-22” scenario where universities require initial funding to boost their performance but may struggle to obtain these funds without demonstrating improvements first. This paradox is a significant hurdle that the council will need to navigate carefully.
Potential Benefits and Risks
Despite these challenges, the potential benefits of performance-based funding are compelling. If implemented thoughtfully, this model could increase accountability among universities, leading to better educational outcomes and more efficient resource use. Moreover, by establishing clear performance targets, the model could incentivize institutions to focus on areas needing improvement, such as increasing graduation rates or improving student retention. Lawmakers and educators alike see this as a means to ensure taxpayer money is spent more effectively, aligning public investments with educational outcomes in a meaningful way.
However, performance-based funding also carries inherent risks, particularly concerning equity and access. Experts caution that this model might unintentionally exacerbate existing disparities among students from different socioeconomic backgrounds. For instance, universities already performing well might continue to receive ample funding, while those serving underrepresented or disadvantaged students could struggle to meet performance benchmarks and face further financial shortfalls. Additionally, there is a concern that institutions might prioritize easily measurable metrics over more qualitative aspects of education, potentially compromising the breadth and depth of academic offerings.
Addressing Equity and Inclusivity
Incentivizing Enrollment of Underrepresented Students
One way to mitigate the risks associated with performance-based funding is by incorporating incentives for enrolling and graduating underrepresented or disadvantaged students. By rewarding institutions that prioritize inclusivity, the funding model can help level the playing field and promote equity across the higher education system. This approach would also align with broader societal goals of diversity and inclusion, ensuring that public funds are used to support not just educational excellence but also social justice.
To achieve this balance, the council could consider metrics that reflect improvements over time rather than static benchmarks. For example, instead of setting a fixed graduation rate target, the formula could reward schools for showing significant year-on-year improvements in graduation rates. This would allow institutions starting from a lower baseline to demonstrate progress and receive the necessary funds to continue their development. Such a dynamic performance metric system would encourage continuous improvement and offer a more equitable funding distribution.
Aligning with Workforce Needs
Another critical aspect of the performance-based funding model is its potential to align educational outcomes with workforce needs. By incentivizing programs that lead to high-demand jobs, the funding formula can ensure that public investments help meet labor market requirements. This focus on job placement and professional readiness not only serves the immediate needs of the economy but also enhances the long-term earning potential and job security of graduates. Lawmakers find this aspect particularly appealing, as it promises a direct return on investment for taxpayers.
Moreover, the inclusion of adult education and retraining programs in the funding formula addresses the needs of non-traditional students, who are becoming an increasingly important part of the student population. These programs can help working adults acquire new skills or transition into new careers, thereby contributing to the overall economic health of the state. By broadening the scope of metrics to include such diverse educational pathways, the performance-based funding model can foster a more inclusive and adaptive higher education system.
Moving Forward: The Role of Future Hearings
Ongoing Deliberations and Input from Stakeholders
As the Performance-Based Funding Council continues its deliberations, ongoing hearings will play a crucial role in shaping the final recommendations. These hearings provide a platform for various stakeholders, including faculty, students, and administrators from affected universities, to voice their concerns and suggestions. The insights gained from these discussions are invaluable for creating a balanced and fair funding formula that addresses the needs of all parties involved.
The council’s commitment to a transparent and inclusive decision-making process is evident in its approach to these hearings. Testimonies from campus communities will help highlight the unique challenges and opportunities faced by each institution, ensuring that the final recommendations are grounded in real-world experiences. This collaborative approach not only fosters a sense of ownership among stakeholders but also enhances the credibility and legitimacy of the proposed funding model.
Toward a Comprehensive and Equitable Formula
Currently, Pennsylvania uses a two-thirds legislative vote to allocate higher education funds, often causing delays and budget unpredictability for universities. The proposed performance-based funding model aims to streamline this by requiring a simple majority to distribute funds. This change is expected to allow for more timely and predictable budgeting, crucial for university planning and operational efficiency. Lawmakers believe this new method will not only speed up funding but also improve allocation accuracy by linking it to specific, measurable outcomes.
A primary goal of the Performance-Based Funding Council is to create a fair and inclusive formula considering diverse performance metrics. Over 30 states in the U.S. have already adopted performance-based models, generally tying about 10% of their funding to metrics such as graduation rates, retention, and degree completion. However, crafting a universally applicable solution remains challenging. Experts like Charles Ansell from Complete College America and Justin Ortagus from the University of Florida point out a “Catch-22” where universities need initial funding to improve performance but struggle to get that funding without showing improvements first. This paradox is a major challenge the council must carefully address.
