Boosting Productivity

Performance-based funding, developmental education reforms and student completion incentives are a few of the initiatives states have launched in the last few years as ways to invest in their higher education systems while maintaining quality. And the Lumina Foundation has helped encourage these -- sometimes controversial -- policies.

A new report from SPEC Associates, a research consulting firm, examines the various steps seven states, along with Lumina, took to increase their productivity at public colleges in an effort to eventually increase the number of students earning degrees. The initiative is connected to Lumina's overall 2025 goal -- to increase the number of Americans with a high-quality credential, certificate or degree to 60 percent by that year. Lumina funded the SPEC report.

"As the recession hit and deepened, an appetite for talking about and increasing productivity in higher education developed," said Kevin Corcoran, strategy director for the foundation. "We looked at states that were more likely to lead to significant gains."

Arizona, Indiana, Maryland, Montana, Ohio, Tennessee and Texas each received four-year grants in 2009 from Lumina to help their states' policy makers develop initiatives to boost productivity.

The four steps, or areas, that Lumina encouraged and which are detailed in the report were:

• Performance-based funding
• Student aid and tuition policies linked to completion
• Various redesigns to improve student pathways and transitions
• New business efficiencies

Corcoran said the focus of the initiative was less about whether the states could deliver on promises within the grant, but rather on building relationships in the states as a way of talking more broadly and holistically about productivity.

Measuring productivity isn't easy, but there was movement to introduce performance-based funding, and research shows that can lead to institutions being more interested in adding student resources, Corcoran said.

That changes the dynamic, he said, so colleges don't consider students to be more expensive as they progress along to completing.

But there are concerns around performance-based funding. Critics have argued that the measures can lead to colleges gaming the system through grade inflation or by admitting fewer at-risk students.

Montana implemented a performance-based funding mechanism using Lumina's framework, as well as student incentives like scholarships that promote full-time enrollment.

All of the state's public colleges receive performance funding based on retention from freshman to sophomore years and in completion, but community colleges also are measured on increases in dual-enrolled high school students, successful remedial education and transfer, while four-year and flagship universities are measured on graduate completion and research measures, said Tyler Trevor, deputy commissioner for planning and analysis for the Montana University System.

"The work we began with Lumina in 2009 really set the state for major transformation on how we look at education," said John Cech, deputy commissioner for academic and student affairs for the Montana University System.

The state is now moving to change how it approaches developmental education and is developing a framework and guidelines for faculty to assess prior learning that may have occurred outside a traditional classroom, he said.

"We're looking at some things that were frankly very foreign to us before, like corequisite design," Cech said, referring to the reform that places remedial students in a college-ready course, but provides additional support. That approach is promoted by Complete College America.

The final piece around business efficiencies was to help institutions find ways to collaborate or coordinate within their operations as a way of lowering their costs. Corcoran said, "That doesn't directly lead to increased productivity, but we did find it's a necessary precondition to getting faculty to change what they do. Faculty members were more likely to be interested in talking about how they work, if they could see that the university was also tackling things they thought were low-hanging fruit on the business side."

Although the grants have completed, Lumina was able to create Strategy Labs as a way for states to see what their peers were doing in other states with these initiatives as well as how to implement the strategies themselves.

"The other thing we learned was strategy labs was a great way to engage states and higher education leaders without having to give them a grant. We found over time, providing the technical assistance and real-time help for states was a better approach," Corcoran said.