JEFFERSON CITY, Mo. — Should higher education institutions be funded on students’ success after graduation? It’s something lawmakers in Jefferson City are discussing.
This funding model has been inactive in the state for years, but back in the 1990s, the Department of Higher Education and Workforce Development said Missouri was the leading state for funding higher education institutions based on performance.
It’s now something the department wants to bring back, to incentivize colleges and universities.
“In theory, money gives incentives for leaders to solve problems and so the student benefits from the environment in which there are fewer barriers because schools are strongly incentivized to reduce those barriers through graduation,” commissioner for the higher education department Zora Mulligan told lawmakers Wednesday.
During a Joint Committee on Education, Mulligan said Missouri currently funds the state’s higher education institutions through a base plus model.
“Which means that every institution gets the same percent increase or decrease in a given year,” Mulligan said. “We have tried many times over the years as a department to shift the focus to increase emphasis on performance funding.”
Mulligan said she would rather see Missouri incentivize schools based on performance as 28 other states do.
“I think the most important measure is always graduation rates,” Mulligan said. “To me, that’s the ultimate success of an institution.”
Last year legislation, Senate Bill 585, was filed to allocate funding to colleges and universities based on the amount of money a student makes after graduation, but the bill never passed the General Assembly.
“If you graduate a lot of doctors, they will have a higher salary and if you graduate a lot of teachers, that’s going to be a lower salary, but you have to have both,” Chairman of the committee Sen. Cindy O’Laughlin, R-Shelbina, said.
The University of Missouri System is in favor of performance-based funding but would rather look at the success of students overpay.
“The outcome measures we think about that tied to workforce development includes the number of degrees granted by degree type,” Chief Financial Officer for the UM system Ryan Rapp said.
Some are concerned this could detour students from certain degrees and career fields.
“We end up disincentivizing the interests of students in particular degree fields because they may not be necessarily a tremendous demand for that work,” Rep. Doug Richey, R-Excelsior Springs, said. “It seems like we’re missing the real point of higher education and we are chasing after various details.”
Paul Wagner from the Council of Public Education said the governor, lawmakers, and the department need to be on board with the same goal for this type of funding model, or it won’t be successful.
“I think it’s important that you first started with deciding what you are trying to accomplish, what’s the goal here,” Wagner said. “We don’t want to be in the position of trying to direct people’s choices in life.”
Mulligan said most of Missouri’s colleges and universities have been in conversation with the department about the topic but not all are on board.
She said this also could cause brutal challenges for schools that have declining enrollment or are struggling.
“It can create a vicious cycle for schools that are already struggling if they don’t have the additional investment that is represented by performance funding, they will do everything they can to improve but often those changes require resources,” Mulligan said.
The committee hopes to meet again before lawmakers return in January.