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The document discusses the book 'Outcomes Based Funding and Race in Higher Education: Can Equity be Bought?' by Tiffany Jones and others, which examines the implications of performance and outcomes-based funding (POBF) policies on racial equity in higher education. It highlights the evolution of POBF, its impact on funding allocation based on student outcomes, and the challenges faced by Minority-Serving Institutions (MSIs) that serve a significant number of students of color. The book aims to provide insights and recommendations for policymakers to enhance equity in higher education through POBF strategies.

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0% found this document useful (0 votes)
15 views172 pages

Outcomes Based Funding and Race in Higher Education Can Equity Be Bought 1st Edition Tiffany Jones Download

The document discusses the book 'Outcomes Based Funding and Race in Higher Education: Can Equity be Bought?' by Tiffany Jones and others, which examines the implications of performance and outcomes-based funding (POBF) policies on racial equity in higher education. It highlights the evolution of POBF, its impact on funding allocation based on student outcomes, and the challenges faced by Minority-Serving Institutions (MSIs) that serve a significant number of students of color. The book aims to provide insights and recommendations for policymakers to enhance equity in higher education through POBF strategies.

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Collection Highlights

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Jones

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Higher Education Joshua Hunt

Race Politics and Education in Brazil Affirmative Action


in Higher Education 1st Edition Ollie A. Johnson Iii

Race Equity and Education Sixty Years from Brown 1st


Edition Pedro A. Noguera
Teaching and Learning for Social Justice and Equity in
Higher Education: Foundations Laura Parson

Policy Analysis of Structural Reforms in Higher Education:


Processes and Outcomes 1st Edition Harry De Boer

Family background and university success differences in


higher education access and outcomes in England First
Edition Crawford

Dismantling Race in Higher Education: Racism, Whiteness


and Decolonising the Academy Jason Arday

Enhancing Inclusive Instruction: Student Perspectives and


Practical Approaches for Advancing Equity in Higher
Education 1st Edition Addy
Outcomes Based Funding and Race
in Higher Education
Tiffany Jones • Sosanya Jones • Kayla C. Elliott • LaToya Russell Owens •
Amanda E. Assalone • Denisa Gándara

Outcomes Based
Funding and Race
in Higher Education
Can Equity be Bought?
Tiffany Jones Sosanya Jones
The Education Trust Southern Illinois
Washington, District of Columbia, University-Carbondale
USA Carbondale, Illinois, USA

Kayla C. Elliott LaToya Russell Owens


Florida Atlantic University Georgia State University
Boca Raton, Florida, USA Atlanta, Georgia, USA

Amanda E. Assalone Denisa Gándara


Southern Education Foundation Southern Methodist University
Atlanta, Georgia, USA Dallas, Texas, USA

ISBN 978-3-319-49435-7 ISBN 978-3-319-49436-4 (eBook)


DOI 10.1007/978-3-319-49436-4
Library of Congress Control Number: 2016961801

© The Editor(s) (if applicable) and The Author(s) 2017


This work is subject to copyright. All rights are solely and exclusively licensed by the
Publisher, whether the whole or part of the material is concerned, specifically the rights of
translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on
microfilms or in any other physical way, and transmission or information storage and
retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology
now known or hereafter developed.
The use of general descriptive names, registered names, trademarks, service marks, etc. in this
publication does not imply, even in the absence of a specific statement, that such names are
exempt from the relevant protective laws and regulations and therefore free for general use.
The publisher, the authors and the editors are safe to assume that the advice and information in
this book are believed to be true and accurate at the date of publication. Neither the publisher
nor the authors or the editors give a warranty, express or implied, with respect to the material
contained herein or for any errors or omissions that may have been made. The publisher remains
neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Cover illustration: Cover pattern © Melisa Hasan

Printed on acid-free paper

This Palgrave Macmillan imprint is published by Springer Nature


The registered company is Springer International Publishing AG
The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland
CONTENTS

1 Show Me the Outcomes! The Emergence of Performance


and Outcomes-Based Funding in Higher Education 1

PART I Understanding the Impact of POBF on Racial Equity

2 Double or Nothing, States Betting It All on Performance


and Outcomes-Based Funding and the Implications
for Equity 13

3 Reparations and Rewards: Performance and Outcomes-


Based Funding and De Jure to De Facto Segregation
in Higher Education Systems 31

4 Impacting the Whole Community: Two-Year


Minority-Serving Institutions and Performance
and Outcomes-Based Funding in Texas 61

PART II Examining POBF Design, Adoption, & Revision

5 A Critical Analysis of the Sociopolitical Climate for POBF


in Three States 85

v
vi CONTENTS

6 Policy Actors, Advocates, and Critics: The Promotion


and Critique of Performance and Outcomes-Based
Funding’s Impact on Equity 107

7 Between Words and Action: The Problem with POBF


Indictors for Achieving Racial Diversity 123

8 Toward a New Framework for Funding for Equity 145

Index 161
LIST OF FIGURES

Fig. 4.1 Major Sources of Operating Revenue for Community


Colleges in Texas, FY 2011. Source: Legislative Budget
Board 2013 68
Fig. 4.2 Per-Student Funding for Community Colleges in Texas,
Before Performance Funding (2003–2013) and During
Performance Funding (2014–2015) 71
Fig. 4.3 Total Success Points Funding by Fall Headcount
Enrollment by MSI Designation, 2014 72
Fig. 4.4 Total Success Points by Enrollment by Quartiles
for Proportions of Student Subgroup Enrollments,
FY 2014–2015 75

vii
LIST OF TABLES

Table 2.1 Ohio Funding Formula 17


Table 2.2 Central State Percentage Change 18
Table 2.3 Tennessee Funding Formula 22
Table 2.4 Tennessee Higher Education Per-student Allocation 24
Table 3.1 Timeline of Critical Desegregation Cases and Other Key
Events Impacting Higher Education for Blacks 39
Table 3.2 2014 Performance Funding Allocations for Florida State
University System Institutions 47
Table 3.3 Florida’s 2014 POBF Metrics and Measurements 49
Table 4.1 Median Per-Student Funding for Public Community/
Junior Colleges from State Appropriations, by MSI
Designation and POBF Operation 70
Table 4.2 Weighted Student Success Points by Total Fall Headcount
Enrollment for Each Metric, by Weight and MSI
Designation, 2014–2015 73
Table 5.1 A Comparative Snapshot of Each State and its Adoption
of POBF Policy 87
Table 6.1 Stakeholder Perspectives on POBF and Equity 111
Table 7.1 Explicit State POBF Indicators and Weights Addressing
Racial Diversity and Equity 131
Table 7.2 State POBF Proxies for Racial Diversity 134

ix
PART I

Understanding the Impact of POBF


on Racial Equity
CHAPTER 1

Show Me the Outcomes! The Emergence


of Performance and Outcomes-Based
Funding in Higher Education

Abstract This chapter explains the evolution and characteristics of perfor-


mance and outcomes-based funding (POBF) and why it matters to achiev-
ing equity in higher education. It also describes the research questions,
methods, and theoretical frameworks guiding the book.

Keywords Performance funding  Chapter overview  Outcomes-based


funding

Over the last decade, concerns about the cost and value of college have
saturated the media. Less than 24 hours after HBO aired an episode about
the student loan crisis on its VICE documentary series, presidential candi-
date Hillary Clinton released a proposal to provide student loan forgiveness
to entrepreneurs. Higher education sessions and national education policy
forums are dominated by topics like “how to measure the value of college,”
“college affordability,” and “free community college.” These movements
represent the growing concern over the costs of college, students’ reliance
on student loans to pay for college, and, ultimately, whether or not it is all
worth it.
With less than half of all students in the United States completing a college
degree within six years, and student loan debt reaching $1 trillion, policy-
makers have become entrenched in a movement to hold colleges and uni-
versities more accountable to their supporters. Similar to K-12 accountability,

© The Author(s) 2017 1


T. Jones et al., Outcomes Based Funding and Race in Higher
Education, DOI 10.1007/978-3-319-49436-4_1
2 OUTCOMES BASED FUNDING AND RACE IN HIGHER EDUCATION

officials are pressured to answer questions about student outcomes and


performance, the value of education, the effectiveness of instructors, and the
ability of existing leaders to manage college budgets efficiently and effectively.
States have also taken numerous actions to hold institutions of higher educa-
tion more accountable by adopting performance and outcomes-based fund-
ing (POBF) policies. Through POBF, public colleges and universities receive
state funding through formulas that no longer rely solely on student enroll-
ment, but are instead based on student outcomes. This means that lower
student outcomes such as graduation rates result in less funding for the
college or university.
POBF policies were first introduced to encourage higher education insti-
tutions to focus on issues that governments and voters felt were important,
such as outputs and efficiency (Dougherty et al., 2015). As the costs of higher
education increased in the 1980s and 1990s, so too did the demand for
greater proof that institutions provided a high-quality education and higher
graduation rates. As of 1994, more than one-third of states implemented
POBF policies that provided financial incentives for measures such as provid-
ing access for undergraduate students, sustaining quality in undergraduate
education, creating national competitiveness in graduate studies and research,
meeting critical state needs, and maintaining managerial efficiency and effec-
tiveness (Ruppert, 1994). The 1.0 version of POBF policies allowed states to
provide bonus money for high-performing campuses. However, the eco-
nomic crisis of the new millennium resulted in the reduction of such policies,
as states did not have enough funding to provide incentives to affect institu-
tional behaviors (Burke and Modarresi, 2000; Shulock, 2011). But more
recently, the popularity of POBF policies has reemerged as a result of limited
state resources for higher education and an increased demand for account-
ability for all public spending (McLendon et al., 2006). Instead of making
bonus funding available, the limited resources of POBF 2.0 stipulate that
either some or all of a campus’s base funding must be determined by student
outcomes. So far, over half of all states have adopted a funding formula that
takes student outcomes and institutional performance into account (National
Conference of State Legislatures, 2015).

HOW DOES POBF WORK?


Historically, states determined campus funding based on inputs or student
enrollment; however, POBF policies often consider student inputs, pro-
gress, and outcomes. Within POBF policies, states use input metrics to track
1 SHOW ME THE OUTCOMES! THE EMERGENCE OF PERFORMANCE . . . 3

and reward campuses that enroll and hire desired student and faculty popula-
tions. For instance, the state of Virginia measures increases in the enrollment
of in-state undergraduate students from underrepresented populations,
including low-income, first-generation, and racial and ethnic minority stu-
dents. Progress metrics includes variables like credit accumulation and reten-
tion that demonstrate colleges’ progress toward degree completion and
other outputs. Progress metrics are paired with process metrics that capture
institutional efforts to increase their capacity in ways that could increase
their institutional effectiveness. For example, in Arkansas, progress is mea-
sured at four-year institutions based on the percentage of students who earn
18 or more credit hours over two academic years. The output metrics
represent states’ goals for public higher education, which most often
means overall degree completion for targeted student populations. For
instance, the state of Nevada rewards campuses based on the number of
bachelor’s degrees conferred during an academic year. States also use POBF
metrics designed to meet state equity and diversity goals by rewarding
campuses for the enrollment and success of students that they have char-
acterized as academically “at risk” or underprepared, including adult, low-
income, underrepresented racial minority, transfer, and first-generation col-
lege students. In Oklahoma, POBF is awarded based on the retention of
Pell Grant recipients and other factors.
Since states use different definitions and metrics to define and measure
performance, models vary considerably across state lines. HCM strategists
(Snyder, 2015) have identified four different types of models to classify the
policies based on their level of sophistication and adherence to promising
practices. HCM’s typology classified Type I systems as those that are rudi-
mentary, do not involve high levels of funding, and represent a minimal
alignment between completion and attainment goals and the state’s finance
policy. Types II and III represent increasing degrees of development and
adherence to promising practices, while Type IV systems are the most robust,
with significant and stable funding, full institutional participation, differentia-
tion of metrics by sector, and prioritization of both degree/credential com-
pletion and outcomes for underrepresented students.

POBF’S SIGNIFICANCE AND IMPACT


States should be cautious in how they design their POBF policies, as
evidence illustrating that the adoption of particular POBF policies leads
to the desired student outcomes remains inconclusive. Scholars who have
4 OUTCOMES BASED FUNDING AND RACE IN HIGHER EDUCATION

studied the impact of these funding formulas have found that some
policies limited or even negatively impacted student outcomes like reten-
tion and graduation rates (Tandberg and Hillman, 2013). In some cases,
policies have even resulted in unexpected outcomes like increased selec-
tivity and increased certificate rather than degree attainment to reach
completion goals at community colleges (Dougherty et al., 2015;
Hillman et al., 2015). What remains is a limited understanding about
the implications of these policies for achieving equity in higher educa-
tion. It is also necessary to consider what POBF policies mean for
students of color–many of whom are first-generation college students
from low-income households–and the colleges and universities that pri-
marily serve these student populations, such as Minority-Serving
Institutions1 (MSIs).
Although the enrollment of students of color in higher education has
increased over time, gaps in completion rates have increased (Eberle-Sudre
et al., 2015). MSIs have fewer resources than non-MSIs, but are responsible
for enrolling two of every five students of color in higher education; in fact,
public MSIs enroll over half of all students of color in public higher educa-
tion (Cunningham et al., 2014; Jones, 2014). As higher education becomes
increasingly stratified, where students attend college, the resources pos-
sessed by those institutions, and the outcomes institutions are able to
achieve all matter. Indeed, such is critical, as students of color and low-
income students are often educated at the least-resourced institutions across
the educational pipeline. Therefore, the approaches policymakers use to
determine resources at colleges and universities that educate large propor-
tions of such students are of the utmost importance. Consequently, the aim
of this book is to examine the implications of POBF for racial equity in
higher education. More specifically, the book will:

1. Discuss how states have addressed equity in their POBF policies, and
the possibilities and limitations of these approaches;
2. Discuss the specific implications and outcomes of POBF for MSIs,
which are most likely to serve the populations who experience
significant inequities in higher education;
3. Provide policymakers and higher education scholars with recom-
mendations and strategies for using POBF to advance racial equity
in higher education; and
4. Encourage communication between those engaged in higher edu-
cation policy and the issues thereof.
1 SHOW ME THE OUTCOMES! THE EMERGENCE OF PERFORMANCE . . . 5

BOOK OVERVIEW
Theoretical Framing
Educational policy research is often disconnected from the political and
historical contexts that shape the policy being studied (Halpin and
Troyna, 1994). As Bensimon and Bishop (2012) explain, “The scho-
larship and policy frames that are familiar to decision makers and
practitioners too often fail to ask the ‘race’ question critically and
knowledgeably” (p. 2). We sought to address this gap by employing
throughout the book critical frameworks that center issues of race and
inequality, such as intersectionality, Critical Race Theory (CRT), and
Critical Discourse Analysis. We most commonly used CRT, which
challenges assumptions of objectivity and embraces the understanding
that seemingly neutral laws and policies often have consequences and
outcomes that either sustain or exacerbate existing structural and
institutional racial inequities (Bell, 1980; Solorzano and Yasso,
2002). In particular, we applied the CRT tenets of the permanence of
racism and interest convergence to understand the implications of
POBF policies for students who have been historically underrepre-
sented and for the campuses that primarily enroll them.

Methods
The methods used vary across each chapter, but involve either one or more
of the following strategies: (1) a comparative analysis of publicly available
POBF allocations by institutional type (the state allocation data were cre-
ated and made publically available by each state’s respective higher educa-
tion agency); (2) an analysis of publicly available data on state POBF policy
descriptions, which was conducted through a systematic review and evalua-
tion of documents, including print, electronic, and digital media records,
and artifacts for the purpose of uncovering new knowledge (document
analysis supports our goals to employ a critical framework because this
method provides context, highlights gaps, poses questions that need to be
asked, and verifies or corroborates claims) (Creswell and Plano Clark,
2007); (3) the use of publicly available data trends from sources like The
National Center for Education Statistics, which were used to provide demo-
graphic, enrollment, and completion information for the campuses in each
state; and (4) the use of data from semistructured participant interviews
6 OUTCOMES BASED FUNDING AND RACE IN HIGHER EDUCATION

(Olson, 2011) that lasted approximately 1 hour each. Purposeful sampling


(Patton, 1990) was used to select 11 participants, which included higher
education researchers and leaders, and nonprofit and policy organization
leaders, some of whom have been instrumental in POBF design in their
respective states. The group included four participants representing non-
profit organizations engaged with higher education policy and advocacy, six
academic researchers studying higher education accountability systems, and
one participant serving as a campus leader at a public four-year university
that primarily serves low-income students and students of color in a state
with a POBF policy.
In previous studies comparing POBF models in different states, it has
been noted that contextual features may play a role in how a state’s
model is conceived, supported, and implemented (Dougherty et al.,
2015). Furthermore, it should be noted that for each state there is a
unique history of the use and implementation of POBF, which inevitably
may complicate how institutions respond to the model itself and how
subsequent funding cuts impact the institution. We used a purposive
sampling technique (Maxwell, 2005) in order to include states that were
not only employing a POBF system, but were allocating moderate to
high levels (at least 5%) of higher education allocations to the POBF
model. We also wanted states that provided regional diversity and
included a diverse group of higher education institutions, including
two- and four-year MSIs. Within the discussion of national trends, the
book includes in-depth analyses of existing POBF systems in Ohio,
Florida, Tennessee, and Texas, and proposed models in California,
Texas, and Maryland. There are also states like Tennessee that, due to
their long-standing policy and significant state investment in POBF, are
looked to as models for other states’ policy design, thus we focused on
highly influential states such as this one. Additionally, Texas has a POBF
policy that applies to its two-year campuses, including a robust set of
MSIs that will be addressed in Chapter 4. Texas has a separate proposed
policy that, if adopted, would apply to all four-year MSIs in the state. We
include both analyses because the state of Texas has one of the largest
numbers of public MSIs in the nation, and both the adopted policy for
two-year colleges and the proposed policy for four-year institutions have
the potential to significantly impact a large group of students of color.
Detailed descriptions of how states are examined in the chapters are
provided below.
1 SHOW ME THE OUTCOMES! THE EMERGENCE OF PERFORMANCE . . . 7

Chapter Descriptions
The book begins with three studies examining the impact of POBF on
racial equity in four states. Impact is measured in multiple ways, but each
chapter addresses funding allocations to campuses enrolling students of
color and how equity is rewarded in those systems. The second half of the
book focuses on POBF design in existing and proposed policies, and how
states are attempting to account for and reward racial and other types of
equity. The book also addresses policy influencers’ perspectives on how
POBF impacts equity, and how those perspectives impact policy design
and adoption. Finally, the book closes with recommendations for rede-
signing POBF to advance racial equity.
Chapter 2, “Double or Nothing: States Betting It All on Performance and
Outcomes-Based Funding and the Implications for Equity,” addresses the
effects of POBF measures on four-year MSIs in states that have made
a significant investment in performance-based funding measures. Two states,
Ohio and Tennessee, serve as the focus of this chapter, and their POBF data
are analyzed in depth. In both states, a significant amount of school funding is
dependent on performance measures, with Historically Black Colleges and
Universities (HBCUs) faring seemingly well. Considering these outcomes, it
is imperative to understand how states account for equity in their policy to
ensure MSIs are not disadvantaged. Thus, this chapter gives a detailed over-
view of factors considered in both Ohio’s and Tennessee’s funding formulas,
and how those factors specifically affect MSIs in those states.
In Chapter 3, “Reparations and Rewards: Performance and Outcomes-
Based Funding and De Jure to De Facto Segregation in Higher Education
Systems,” the authors use the case study method to explore POBF policies in
Florida and how they either depart from or extend to the once legally
segregated South. In order to understand the social implications of these
policies, the authors first review the history of HBCUs in the South, discussing
the once legally enforced segregation these institutions experienced, the
desegregation cases that acted as legal interventions to help create equality,
and the de facto segregation that often resulted from those interventions.
Finally, this chapter explores whether the POBF policies and resulting
resource allocations work to support the mission of the desegregation cases,
or if these policies are simply another example of de jure segregation that
ultimately results in separate and unequal institutions of higher education.
Chapter 4, “Impacting the Whole Community: Two-Year Minority-
Serving Institutions and Performance and Outcomes-Based Funding in
8 OUTCOMES BASED FUNDING AND RACE IN HIGHER EDUCATION

Texas,” includes an overview of POBF policies in Texas and discusses how


these policies plan to improve student outcomes at specific two-year MSIs.
The chapter also includes a description of the metrics Texas used to
determine POBF allocations among two-year MSIs and two-year non-
MSIs. Texas uses the Student Success Points model for incorporating
POBF into the community college instructional appropriation. The
authors evaluate the impact of the model on student retention and gra-
duation rates at two-year Hispanic-Serving Institutions (HSIs) and Asian
American and Native American Pacific Islander-Serving Institutions
(AANAPISIs) in the state.
In Chapter 5, “A Critical Analysis of the Sociopolitical Climate for POBF
in Three States,” the authors use a critical policy framework to examine the
sociopolitical climate of three states with rapidly increasing populations of
color: Texas, California, and Maryland. These states are examples of active,
failed, and proposed legislation for performance-based funding designed to
increase accountability for better outcomes in higher education. The
authors’ examination offers a critical perspective on how different factors
within a state’s context may shape the ways in which differently resourced
institutions are considered in the creation and adoption of POBF policy.
Chapter 6, “Policy Actors, Advocates, and Critics: The Promotion and
Critique of Performance and Outcomes-Based Funding’s Impact on
Equity,” includes a review of data from a qualitative interview study
conducted with POBF advocates and critics from various organizations
focused on higher education, campus leaders, and academic researchers.
As more states move toward substantial POBF formulas for higher educa-
tion, it is crucial to understand how these policies work to advantage or
disadvantage our most vulnerable student populations. In this chapter, we
explore higher education leaders’ insights and experiences with POBF,
specifically targeting leaders who have been publicly vocal about the ways
the policies have helped or inhibited equity.
Chapter 7, “Between Words and Action: The Problem with POBF
Indictors for Achieving Racial Diversity,” examines the discourse of diver-
sity as it is framed by POBF models. Using critical discourse analysis, we
map the prevalence and parameters of the discourse of diversity within
POBF models. Our findings will illustrate the limits and potential negative
implications of the framing within POBF models for racial diversity and
equity. Recommendations for policymakers, institutional leaders, and
researchers about how POBF can be more reflective and purposeful towards
supporting institutional racial diversity and inclusion goals will be offered.
1 SHOW ME THE OUTCOMES! THE EMERGENCE OF PERFORMANCE . . . 9

In Chapter 8, “Toward a New Framework for Funding for Equity,” the


authors propose a framework for using higher education funding and
policy to advance equity issues. This new framework challenges existing
ones that focus on inputs and outputs, ignore issues of institutional
capacity, and rarely involve campus leaders in policy development and
implementation. This chapter also addresses how POBF in particular is
changing the purposes/goals of higher education. Finally, it provides
recommendations for policymakers who are working to advance equity
within existing policy structures.

NOTE
1. Minority Serving Institutions (MSIs) include Historically Black Colleges
and Universities (HBCUs), Hispanic Serving Institutions (HSIs), Tribal
Colleges and Universities (TCUs), and Asian American and Native
American/Pacific Islander-Serving Institutions (AANAPISIs).

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CHAPTER 2

Double or Nothing, States Betting It All


on Performance and Outcomes-Based
Funding and the Implications for Equity

Abstract This chapter addresses the effects of POBF measures on four-year


MSIs in states that have made a significant investment in performance-based
funding measures. Two states, Ohio and Tennessee, serve as the focus of
this chapter, and their POBF data are analyzed in depth. In both states, a
significant amount of school funding is dependent on performance mea-
sures, and HBCUs are faring seemingly well. Considering these outcomes,
it is imperative to understand how states are accounting for equity in their
policy to ensure MSIs are not disadvantaged. Thus, this chapter gives a
detailed overview of factors considered in both Ohio’s and Tennessee’s
funding formulas and how those factors specifically affect MSIs in those
states.

Keywords Equity measures  Historically Black Colleges and Universities


(HBCUs)  Incentives

INTRODUCTION
In the discussion of POBF, the effect on MSIs–specifically HBCUs, institu-
tions that generally serve underserved students (students of color, and first-
generation and low-income students)–is a hotly debated issue (Cunningham
et al., 2014). Proponents of POBF argue that funding plans increase
institutional effectiveness, ensuring that these universities better serve under-
served students and guarantee on-time graduations (i.e., within six years).

© The Author(s) 2017 13


T. Jones et al., Outcomes Based Funding and Race in Higher
Education, DOI 10.1007/978-3-319-49436-4_2
14 OUTCOMES BASED FUNDING AND RACE IN HIGHER EDUCATION

Detractors note that, in order to compete for funds, institutions with missions
to serve underserved students are abandoning those missions and becoming
more selective in their admissions processes. By neglecting underserved stu-
dents, and instead focusing on admitting students with the highest grades and
test scores, they argue that underserved students are being “creamed” out of
the college experience, and while institutions may not want to abandon these
students, they are forced to do in order to survive (Dougherty et al., 2014).
Others participating in the debate explain that, while POBF may have
some unintended negative consequences, including creaming, there are
examples of specific states that are doing a better job of ensuring equity.
Two states commonly identified for building equity into their outcomes-
based formulas are Ohio and Tennessee. Interviewed researchers note
that these states have been deliberate about addressing equity by creating
premiums in the formula for students who have been identified as at-risk
or high needs. The question that remains is how these premiums trans-
late to outcomes for not only underserved students, but for the colleges
and universities explicitly committed to and already serving a student
body comprised of largely low-income students of color. This chapter is
aimed at understanding whether equity is built into these metrics to
simply send the message that the states care about equity, or whether it
actually ensures equitable outcomes for vulnerable student populations.

THEORETICAL FRAMEWORK
One consistent complaint from stakeholders about POBF is that it is a one-
size-fits-all solution for increasing institutional performance. This is a parti-
cularly important point when considering publicly funded HBCUs, as they
have a distinct mission and history resulting from the communities they were
founded to serve. The survival of these institutions is critical to underserved
communities of color; some of the students they educate would likely not be
accepted into Predominantly White Institutions (PWIs). Thus, these institu-
tions play a critical role in the struggle for racial equity in higher education.
In order to assess the effects of POBF on HBCUs and racial equity, it is
necessary to use a critical race lens when reviewing funding formulas.
A critical race lens requires researchers to situate their examinations in a
larger history of the struggle for educational opportunity and equity for
people of color. Government policy and, more specifically, HBCUs have
played a pivotal role in ensuring a move toward equity. Thus, it is crucial to
review policy with a critical consideration of racial disparities and opportunity
2 DOUBLE OR NOTHING, STATES BETTING IT ALL ON PERFORMANCE . . . 15

gaps. CRT points to the necessity to analyze policy, considering the long
history of non-White people’s participation (or denial thereof) in the educa-
tion system, and the need for mandated government policy to ensure
participation in higher education (Harper et al., 2009). Considering the
role HBCUs continue to play in ensuring African-American educational
equity–including producing disproportionally high numbers of graduates in
crucial fields like Science, Technology, Engineering, and Maths (STEM) and
education–it is imperative to analyze government policies that involve funding
students to ensure they are not experiencing deleterious outcomes. In this
examination, we explicitly counter the concept of racelessness, addressing the
role White supremacy and racism have played in disadvantaging people of
color, and specifically African-Americans, in higher education (Patton, 2016).

METHODS
This research is a content analysis of POBF data from Ohio and Tennessee,
as well as semi-constructed interviews with POBF stakeholders throughout
the U.S. Data reviewed in this study include higher education expert inter-
view transcripts; state POBF formulas; institution metrics, including state
funding and per-student allocation; student success metrics, including com-
pletion rates and retention rates; and institution demographics, including
endowment, percentage of students of color, undergraduate enrollment,
and Pell student enrollment. Interview transcripts were analyzed from inter-
views conducted with higher education professionals who were actively
involved in the national debate on POBF.
A content analysis is a research method concerned with analyzing
written, verbal, or visual communication messages, and making inferences
about them within their context (Krippendorff, 1980). This content
analysis goes beyond the immediately observed to first analyze the historic
and symbolic qualities of communication, and then make inferences from
the data, deriving themes, concepts, and categories. Content analysis is a
nonlinear process; all data are given the same consideration whether
entered at the beginning or end of the analysis. This analysis is an inductive
process that allows the researcher to develop concepts based on the actual
POBF data, as well as enabling the researcher to detect trends, patterns,
and differences that are not readily seen by users (Krippendorff, 1980).
The first step required in content analysis is design. The design of the
analysis is where researchers introduced the context of the research and valid
criteria for making inferences. Next, the researchers identified sampling units
16 OUTCOMES BASED FUNDING AND RACE IN HIGHER EDUCATION

for the study. After coding sample data, they created categories drawn from
the research. Codes were then used to draw inferences from the data to the
overall themes of the research questions.

Overview of Ohio Formula


In Ohio, POBF determines 100% of state funding for higher education. The
state currently has 38 publicly funded institutions affected by the introduction
of performance-based funding. Of those 38 institutions, Central State
University, an HBCU, is the only MSI. Central State accounts for 2% of
public state-funded institution enrollment in the state, and generally enrolls
1,995 students of color who constitute 98% of the university’s enrollment.
POBF in Ohio is mainly determined by output metrics, including degree
completion, course completion, and doctoral and medical set-asides. As of
2015, the state included an equity output awarding additional weights for
degree completion in STEM fields as well as for at-risk students. The state
defines at-risk students as those who are Pell Grant eligible, Native American,
African-American, or Hispanic, or those who are 25 years of age and older.
Thus, institutions with diverse student bodies, as determined by income, race,
and age, are given additional weights in funding consideration. Ohio is one of
the few states with POBF that has been purposeful about including incentives
for racial equity in their metric (National Conference of State Legislatures,
2015). As one higher education professional explained, “Ohio is the only
[state] that has clearly articulated certain ethnic and racial minority popula-
tions as an access category or a priority category.”
Table 2.1 illustrates how Ohio’s funding formula has evolved since
2013. The state has increased focus on degree completion, decreased
focus on course completion, and begun to include equity considerations,
though they are not included in the formula as a specific category. Rather,
equity is included as a consideration for additional weights throughout
each funding category.

Overview of Central State 2013-1025


Central State University is an HBCU and open-access institution located
in Wilberforce, Ohio, and founded in 1887. It began as a Combined
Normal and Industrial Department at Wilberforce University. The
objectives of this new state-sponsored department were to provide
teacher training and vocational education, and to stabilize these
2 DOUBLE OR NOTHING, STATES BETTING IT ALL ON PERFORMANCE . . . 17

Table 2.1 Ohio Funding Formula


Funding category FY 2013 FY 2014 FY 2015

Degree completion 18% 50% 50%


Course completion 61% 30% 30%
Doctoral and medical set 20% 19.7% 20%
asides
Historical set asides 1% 0.3% 0%
Other considerations Additional weights Additional weights
awarded for degree awarded for degree
completion in STEM completion in STEM
fields fields and at-risk
student degree
completion

Note: All data were retrieved from the Ohio Board of Regents

programs by assuring a financial base similar to that of other state-


supported institutions. The department grew from a two- to a four-
year program, and in 1947, it legally split from Wilberforce, becoming the
College of Education and Industrial Arts at Wilberforce. The name was
changed in 1951 to Central State College, and in 1965, the institution
achieved university status. The university enrolls 2,036 undergraduates,
98% of whom are students of color. Central State University has an 88%
Pell population, a 53% retention rate, and a 25% six-year graduation rate.
It is important to note that the university’s endowment is $2,009,394,
significantly less than all other publicly funded universities in Ohio.

POBF Outcomes
Under POBF from 2013 to 2014, Central State University suffered a
2.10% decrease in allocation, and per-student funding was reduced from
$3,095.59 to $3,031.76, both below the per-student allocation average
for public universities. Though equity measures that would benefit the
university are now in place, they were not in 2014 (see Table 2.2).

Considerations for Central State University


Using an equity lens to analyze the effects of POBF on Central State
University, it is important to consider a few points. First, Central State
18 OUTCOMES BASED FUNDING AND RACE IN HIGHER EDUCATION

Table 2.2 Central State Percentage Change


Institution Funding prior POBF year 1 % change in Per- Per-
to POBF (2014) allocation student student
(2013) allocation allocation
(2013) (2014)

Central 6,302,628 $6,172,666 −2.10% $3,095.59 3,031.76


State
University
University $156,581,998 $160,294,129 2.40% $6,605.16 6,761.75
of
Cincinnati
Ohio State $331,828,611 $342,015,847 3.10% $7,507.26 7,737.74
University
Mean 68,043,213 73,866,552 70,954,882 $4,643.35 $4,603.29

University has the smallest endowment of all public Ohio universities;


second, before POBF was introduced, Central State University’s per-student
allocation was lower than the state average; and third, the state flagship
university, Ohio State University, which has less than a quarter of the
number of students of color and 100 times the endowment, receives double
the per-student allocation than that of Central State.
In 2015, the Ohio legislature introduced equity measures into the POBF
formula, adding considerations for universities with “at-risk” students. This
introduction can be seen as an attempt to level the playing field for uni-
versities; however, for the state’s sole HBCU, a much stronger push for
equity would be needed to put a school with such a small endowment and a
historically low per-student allocation on the same field as the flagship. In
order for Central State University to compete with other public Ohio
universities, historical underfunding and an acknowledgment of the finan-
cial burden encountered when serving such a high needs population must
first be addressed. Any attempt at equity that does not address the state of
Central State University before the introduction of POBF does little more
than maintain the continuous gap. Additionally, if the goal of those seeking
equity in higher education is to encourage universities to serve a more
diverse student body and support them in their efforts to support that
student body, that goal has not been demonstrated in Ohio’s funding.
Serving by far the most diverse student body of all public universities in
Ohio, Central State University was one of just six of the 38 publicly funded
universities whose funding decreased in the first year of POBF. However,
2 DOUBLE OR NOTHING, STATES BETTING IT ALL ON PERFORMANCE . . . 19

Ohio State University, with students of color comprising just 18% of the
total student body, boasts the highest per-student allocation in the state,
and saw a 3.10% increase from 2013 to 2014. These statistics illustrate that
diversity was neither encouraged nor rewarded in this formula; thus, equity–
and specifically racial equity–was not supported.
So, while Ohio has funded POBF as a way to encourage universities to
increase outputs based on formula objectives, the formula would need a
significant focus on equity in order to encourage universities that fare well
with the current output metrics based on degree and course completion
and doctoral and medical set-asides to risk lowering completion rates by
enrolling and putting significant funding behind educating at-risk stu-
dents. There is not currently an incentive for PWIs, particularly the larger
state universities, to educate underserved students, as they would risk
lowering their completion rates. With additional weighting awarded for
enrolling at-risk students in 2015, there was an increase in Central State
University’s funding; however, because there is not a specific equity out-
put being considered in a percentage of the formula, institutions that do
not serve a diverse student body, or that serve their diverse students well,
will not necessarily see a decrease in funding.
Thus, while the incentive to increase racial equity is not demonstrated in
the funding outcomes, there is an incentive for Central State University to
mission drift, and either avoid enrolling or “cream” out students who are least
likely to complete their education in order to survive. With 100% of their
funding determined by output metrics, it is critical for Central State to
increase completion rates to avoid continuous decreases in funding and
possibly attempt to increase per-student allocation to compete with other
public universities for enrollment. As one HBCU administrator noted:

So we have taken on a mission drift in some ways; that’s how it really hurts
equity: it allows institutions to take on a mission drift to…the purpose of
majority institutions, which in some ways is the intention of the state
legislature in doing it. But, you know, it’s hard to maintain your original
mission and maintain enrollment and all those things if you start to drift over
to a different standard.

It is important to consider that Ohio calculates completion rates based


on a three-year average; thus, if Central State University does not want to
see three years of decreased funding, they will have to make dramatic
advances in completion rates.
20 OUTCOMES BASED FUNDING AND RACE IN HIGHER EDUCATION

Yearly changes in the POBF formula are also important to consider.


One HBCU administrator coined the performance formulas “moving
goalposts,” explaining that HBCUs must be very decisive about funding
endeavors due to extremely limited budgets and the struggle to shift
focus in order to keep up with the formula. Here, it is also critical to
consider the historic underfunding of HBCUs and preferences for flag-
ship state universities. While Ohio awards extra points for students in
STEM programs, we must consider whether Central State University has
been granted the opportunity to develop STEM programs or the funding
to support them. As one HBCU administrator commented:

It still doesn’t apply resources, and resources are much broader. It’s also
[about whether] you have the right mix of programs . . . How can you
compete in a model that says that you have to have degrees for strategic
emphasis? For example, a lot of states are doing that, where you have to
have all these STEMS, but you won’t give me STEM programs . . . So
thinking about resources is not just monetary, you know? The resources
are also . . . buildings. The resources are also about what programs can I
offer; can I offer graduate degrees? All those are included in resources . . .

Messaging About Racial Equity


Recent studies have found little impact of POBF metrics on university
outputs (Hillman et al., 2014). Thus, we are ultimately analyzing what
state formulas are incentivizing. As such, we have to consider what the
funding formula is saying about how we should serve our most under-
served students: poor students of color. Again, while Ohio state legisla-
tures have now decided to award additional points for at-risk students, it
is unclear whether state universities that are thriving without that addi-
tional weight will be likely to risk output metrics by attempting to serve
at-risk populations. Instead, awarding additional weight for at-risk stu-
dents serves as an attempt to assist Central State University in returning
to its original funding levels, which were already below average. HBCUs,
the universities most concerned with this group of students, seem to have
the most at stake under these metrics; they cannot risk losing resources
needed to serve their high-needs population and have a mission to serve
it. Ultimately, Central State, with its history of low funding and the
smallest endowment in the state, is being incentivized to alter practices
2 DOUBLE OR NOTHING, STATES BETTING IT ALL ON PERFORMANCE . . . 21

more than any other university in the system. It is also being encouraged
to shift its focus in order to increase degree and course completion and
meet POBF metric demands rather than putting resources behind ser-
vices for their most-difficult-to-serve students (as outlined in the institu-
tion’s mission). On the other hand, the funding formula does not
strongly encourage PWIs to diversify their student base and educate
poor students of color. Thus, the formula’s underlying message is that
these underserved students simply do not matter enough.

Overview of Tennessee Formula


Similar to Ohio, funding in the state of Tennessee is based nearly 100% on
POBF (Snyder, 2015). Tennessee has nine publicly funded institutions, of
which only one, Tennessee State University, is an HBCU. In fact, Tennessee
State University is the sole four-year public MSI in the state. It enrolls 5,375
students of color, 76% of the institution’s overall undergraduate enrollment.
Tennessee’s POBF metrics include both output metrics and progress/
process metrics. Output metrics include degree completion/conferral,
research and grant funding, student transfers out with 12 hours, degrees
per 100 full-time enrolled (FTE) students, and six-year graduation rates.
The progress/process metric refers to students accumulating 24, 48, and
72 hours. The state awards additional weight for adults (students over 25
years of age) and low-income students. The new formula (2015–2020)
also has a premium for academically underprepared students, and weighs
premiums for adults and low-income students more heavily. The higher
education commission also awards improvement grants originally
intended to aid institutions in building capacity to respond to the for-
mula (although they do not quite have that effect in practice).
Table 2.3 illustrates a breakdown of Tennessee’s funding formula. The
state does not have a specific equity metric, but applies additional weight
to each of the six metrics, considering whether institutions are serving
high-needs students.

Overview of Tennessee State University


Tennessee State University is an open-access land-grant HBCU founded
in Nashville, Tennessee, in 1912. In 1909, the Tennessee State General
Assembly created three normal schools, including the Agricultural and
Industrial Normal School, which grew to form Tennessee State
22 OUTCOMES BASED FUNDING AND RACE IN HIGHER EDUCATION

Table 2.3 Tennessee Funding Formula


Tennessee Type of metric

Students accumulating 24 hours, 48 hours, 72 hours Progress/process metrica


Bachelor’s, master’s, doctoral, law (conferred) Output metric
Research and grant funding Output metric
Transfer out with 12 hours Output metric
Degrees per 100 FTE Output metric
Six-year graduation rate Output metric
a
Adults (over 25) and low-income students completing any of the metrics are more heavily weighted.
Additional weights are applied to each outcome depending on the priority and institutional mission.
Points are awarded based on outcomes metrics, which are then multiplied by the Southern Regional
Education Board’s (SREB) average salary to monetize the formula. Fixed costs and the Quality Assurance
program funds (accreditation, student satisfaction, and licensure exam pass rate) are added on.

University. In 1979, after the university’s faculty filed suit (Geier v.


Tennessee), arguing that Tennessee was maintaining a dual system of
higher education based on race, Tennessee courts ordered the merger of
the University of Tennessee at Nashville with Tennessee State University
(Davis, 1993). Today, Tennessee State enrolls approximately 7,073
undergraduate students and maintains an endowment of $40,298,412.
The university has an approximately 65% Pell population, a 62% retention
rate, and a six-year graduation rate of 42%.

POBF Outcomes
Unlike Central State University in Ohio, Tennessee State University
experienced a 2.66% increase in allocation between 2011 and 2012.
With the introduction of POBF metrics in 2012, Tennessee State
University’s per-student funding was increased from $4,037.16 to
$4,147.48. The University has seen an increase in allocation each year
since the introduction of POBF metrics, and the per-student allocation is
the third highest in the state, exceeded only by the University of
Tennessee-Knoxville and the University of Memphis (Tennessee Higher
Education Commission, 2015; College Results, 2015).

Considerations for Tennessee State University


The state of Tennessee is continuously included in discussions of POBF as
an example of an equitable state system of funding higher education, one
2 DOUBLE OR NOTHING, STATES BETTING IT ALL ON PERFORMANCE . . . 23

that decisively supports underserved students. Though the state does not
have specific considerations for race in its metrics, many experts note that
its additional funding allocations for older (over 25 years old) and low-
income students, and its consideration for institutional missions establish a
system that rewards and supports universities serving high-needs students.
As one HBCU administrator noted, “I think I like Tennessee’s model,
especially looking at . . . the core value of the state, and if the core value of
the state is [that] we believe that we want students to have access to higher
education and we want those students to be a priority in graduation . . . I
think you have to have an equity minded performance metrics model.”
While Tennessee’s introduction of POBF can be understood as an
effort to right both historic and ongoing wrongs in higher education
funding, there are a few similarities between states in terms of flagship
comparisons to smaller state universities. The University of Tennessee-
Knoxville, the state’s flagship, and the University of Memphis, a strong
state institution, boast endowments more than quadruple the amount of
Tennessee State University, and maintain significantly higher per-student
allocations. The University of Tennessee-Knoxville was granted a per-
student allocation of $7,908.76 in 2014, while the University of
Memphis received one of $5,219.14 (Table 2.4).
Consequently, there are a few important considerations in reviewing the
effects of POBF on Tennessee State University, and, ultimately, racial equity
in Tennessee’s higher education system. First, Tennessee has a history of
underfunding Tennessee State University, including a denial of programs
and resources needed to attract students and maintain adequate enrollment.
Second, though Tennessee awards additional weight for older and low-
income students, the University of Tennessee-Knoxville has increased its
funding each year since the introduction of POBF, maintaining a signifi-
cantly higher per-student allocation than Tennessee State University,
though UT serves a drastically less diverse student body, with only 16%
students of color, and a Pell population of approximately 19%.
It seems that the POBF design team addressed historical imbalances in
funding by making equity goals explicit in POBF priorities; however, while
the state addressed class discrimination, they shied away from tying any
equity goals to race. In discussions of metric design for the state, one
administrator explained:

Tennessee institutions get rewarded for students who progress and graduate,
and institutions get an extra bonus or what we call a premium for those
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