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June 2012
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PURPOSE Kentucky joins trend with outcomes funding


Kentucky is about to join join a parade of states that have tied higher education funding to student outcomes.

The state's reordering of how it allots approximately $1 billion in higher ed funding was a focal point of a Wall Street Journal article last week about the broader nationwide trend. The newspaper says at least 33 states have tied at least a portion of their higher ed funding to such measures as graduation rates and student debt loads.

The change was a priority of Republican Gov. Matt Bevin when he was elected in 2015. The Republican supermajorities in the Legislature responded this year by passing a bill sponsored by Senate President Pro Tem David Givens of Greensburg. Bevin is expected to sign it in short order.

Initially 5 percent of funding will be tied to the new formula, which weighs how quickly students advance, what subjects they study, and how many graduate. After the first year, all of the state's higher ed funding will flow through the new model, with about 70 percent tied to student outcomes.

It will be a significant change from what the WSJ refers to as the "inertia model" of old, which based colleges' appropriations on such benchmarks as enrollment and previous appropriations. Givens said of the old model, "While there is comfort in (it), there's no logic."

Kentucky will be far from alone in implementing changes. Arkansas Gov. Asa Hutchinson signed a law last month that will increase funding for Arkansas colleges that keep students on track toward on-time graduation. Tennessee has had a totally outcomes-based formula since 2011. Funding for that state's four-year colleges is up 20 percent during that period, including a 42 percent gain at Austin Peay.

Criticisms of the outcomes-based approach are largely intuitive. One concern is that an emphasis on keeping students on track to graduate could be an incentive to lower academic standards. A second concern is that colleges will attempt to game the system by admitting fewer students from economically disadvantaged backgrounds associated with poorer performance.

Some states take countermeasures however. For instance Tennessee, Ohio and some other states provide extra financial incentives for colleges that show success with high-risk enrollees.

It makes sense that Kentucky and other states are taking steps to sharpen the focus of higher education institutions on producing not only more graduates, but graduates with skills that are needed in today's workforce. Gov. Bevin put it well recently when he said he wants Kentucky colleges to have fewer courses "on interpretive this and interdisciplinary that" because "that is not where the jobs of the 21st century are."

Yes, college should include some courses that provoke and enrich. But these days many seem to have gone off the deep end on that front. Too many students graduate with degrees that have no practical application in the job market. Yet all across the country thousands of high-paying jobs in disciplines like engineering, computer programming and software development go unfilled because colleges aren't producing enough qualified graduates to fill them.

The very purpose of publicly funded two- and four-year colleges is to meet such demands for the benefit of their students and for the benefit of society. The two go hand in hand. Kentucky is taking a big step in the right direction by tying funding to success in this fundamental responsibility.

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