Historically, state universities and colleges have received state funding based on the number of full-time students enrolled at the beginning of the semester. Many states are reconsidering this type of enrollment-based funding.
Supporters say outcomes-based funding (also known as performance-based funding) policies can be a powerful tool for supporting increased postsecondary student achievement. State lawmakers can use funding to encourage institutions to adopt practices that better serve students, support their success and ensure they get a degree, supporters say.
The number of traditional college-age Iowans and the number of high school seniors has declined in recent years and is expected to continue its downward trend. That, along with a Board of Regents proposal to give more money to our state universities for enrolling Iowans, has our higher education institutions preparing to compete harder for Iowa’s shrinking pool of college-bound residents.
Representatives from Iowa private colleges and community colleges recently told legislators about their concerns over the proposal. Gary Steinke, director of the Iowa Association of Independent College and Universities, says it creates unwelcome competition between our state universities and other higher education options.
Steve Schulz, president of North Iowa Area Community College (NIACC) in Mason City, expressed similar concerns. NIACC, like many community colleges, has faced decreasing enrollment amid a recovering economy and fewer Iowa high school graduates. With 53 percent of community college’s general funding coming from student tuition and fees, a decline in enrollment forces a tuition increase on Iowa’s middle-class families.
Retired Maytag CEO Len Hadley says that, of the more than two dozen states that have tried performance-based funding, about half have dropped it. He believes an Iowa plan to base 60 percent of university funding on in-state enrollment is out of line with other states’ experience with performance-based funding.
Dubuque City Manager Michael Van Milligen and Greater Dubuque Development Corporation Vice-President Sarah Harris addressed the potential for unintended consequences to the Iowa economy with the public university funding proposal. The University of Iowa and Iowa State attract thousands of out-of-state students each year, with many making their home here after graduation. The new funding proposal could deter out-of-state student recruitment, hurting our state’s efforts to attract young people who can fill the need for skilled workers.