The Indiana Commission for Higher Education finalized an alternative funding model for higher education that relies more on individual institution goals, rather than blanket recommendations. (Photo by Chip Somodevilla/Getty Images)
Indiana’s Commission for Higher Education (CHE) on Thursday approved specific “outcomes-based” performance goals that must be met annually by each of the state’s colleges and universities in order for the schools to receive additional taxpayer funding.
The incentives-driven funding model was adopted by the commission in May and provides flexibility for institutions to work towards more individualized growth targets.
How much each state school gets will be determined by the new funding formula, which is based on school-specific goals, rather than blanket recommendations under the current model.
CHE’s benchmarks for each school focus on low‐income youth enrollment, adult enrollment, on‐time degree completion, overall degree completion, low-income degree completion, adult degree completion, and STEM degree completion. Indiana University’s flagship Bloomington campus will also be judged, in part, by its research output and expenditures.
Seth Hinshaw, associate commissioner for finance and operations, said the goals represent “a demand for continued improvement for metrics that have been improving,” but additionally, “a demand for improvement,” when necessary.
“If the institution has seen growth over the last several years in the number of low-income completions, we’re going to continue to expect growth from them,” Hinshaw said, referring to an example scenario. “However, if an institution has seen declines in low-income completion, we’re going to expect to see a smaller decline than what we’ve seen in the past.”
The plan earned affirmative votes from all but one board member, Chris LaMothe, who called it “a bit of a protest to our Indiana General Assembly.” He added that lawmakers have for years “gutted” necessary performance funding.
“I’m concerned that we’re setting the bar too low,” he said. “These are not aspirational at a time when we’re in war to make a big difference in our state with young people who need to move on to higher education or workforce development or something that is critically important.”
Goals set for Hoosier schools
State officials maintain the goal is to make Indiana a top-10 state for enrollment in post-high school training and education for both youth and adults. The changes also aim to increase degree completions and overall graduate retention.
As such, degree completions are the primary concern for most Hoosier schools, according to the new goals.
The goal at Ball State, for example, is to confer 3,628 degrees a year and help at least 47.9% of students graduate in four years or less.
Indiana State is aiming to graduate 1,675 students each year, with at least 28.2% of degrees completed on time.
Purdue University West Lafayette and IU Bloomington will work to graduate more than 5,000 students each academic year — at least two-thirds of them on time.
The goals are direct responses to the state’s dismal college-going and completion rates.
Data released last year showed that only half of Indiana’s 2020 high school graduates pursued some form of college education beyond high school. The drop marked the state’s lowest college-going rate in recent history, although the decline has been ongoing for the last five years.
Story continues below.2023-2025-Metric-Goals-All-Institutions
Of those high school graduates who attend college, only two thirds are on track to complete a degree.
CHE Commissioner Chris Lowery said Thursday that Indiana’s college-going rate has since declined by roughly another half-percent. Official numbers for 2021 are expected to be released in the coming weeks.
Prospective funding for post-secondary institutions — meaning the additional funding a college or university can earn on top of its base funding — will be gauged by each school’s progress toward those goals.
So, if a college meets 80% of its degree completion goal, the school gets 80% of the additional funding it qualifies for. Whatever is earned in the first year of the biennium is guaranteed in the second, with the opportunity to earn the remaining 20% of extra dollars in year two.
Goals were determined using recent academic year outcomes to establish a trend, then adjusted to reflect continued improvement and university feedback. The goals moving forward will be measured using academic year 2022-2023 performance and compared against academic year 2020-2021 performance.
But after Ivy Tech Community College spoke out against the new outcomes-based funding model late last year, the state’s largest public postsecondary institution will have its own formula.
Legislators carved out a separate funding plan in the state budget that allows Ivy Tech’s goals to continue to center around employer needs, as well as increased wage outcomes and stackable credentials for students.
The community college previously maintained that — under the funding model for all other higher education institutions — recent progress made by Ivy Tech wouldn’t be rewarded, which could mean millions of dollars were no longer guaranteed.
CHE officials said Thursday that Ivy Tech’s goals are now being finalized separately.
The General Assembly included more than $34 million for the new outcomes-based performance funding formula in the state’s latest biennial budget that was approved in April.
Overall, Indiana’s next two-year budget includes funding increases for the state’s higher education institutions — up 4% in the 2024 fiscal year and 6% in 2025 compared to appropriation levels in the last budget. That’s equal to $130 million in new money over the biennium.
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