Performance-based funding could disrupt community colleges

According to the study, even though 78 percent of Texas students earning a bachelor’s degree in 2010-2011 previously attended a two-year college at some point (which amounts to the highest percentage in the United States, notes the report) about half of those who enter Texas community colleges do not return for a second year and only half of those students who do return earn a post-secondary credential 6 years after their initial enrollment.

Additionally, in tracking more disadvantaged students, the study found that those who had a GED instead of a high school diploma–African-Americans, older students, part-time students, and those assigned to the lowest level developmental courses–accumulated a significantly lower amount of PBF for their college than their peers. These groups made up the majority of the 28 percent of the original sample, who would earn zero PBF for their institution.

The report noted that even though the PBF model Texas has in place compares every institution to itself rather than against other community colleges in potentially more privileged areas, the issue of more resource-dependent colleges denying admission to many students less likely to succeed based on certain demographics and academic backgrounds (and thus fail to procure more PBF funding), persists.

Also, though open-access community colleges are usually unable to restrict admissions, there are still ways in which they can do so, says the report. According to the Community College Research Center, colleges can minimize recruitment efforts at area high schools with larger numbers of disadvantaged students, as well as offer less developmental or adult basic education courses.

“Such undesirable institutional behaviors may be more of an impending threat than a reality at present,” write McKinney and Hagedorn. “However, this could quickly change for cash-strapped institutions if larger proportions of state funding in Texas become tied to student outcomes, which seems likely given trends in other states. In addition, if community colleges go underfunded as a result of PBF, it could create a vicious cycle where fewer institutional resources are available to help disadvantaged students graduate, thus leaving behind more and more of the students that depend on community colleges the most.”

In conclusion, the study offers a possible solution: In addition to performance-based funding, there could be a simultaneous funding incentive for the enrollment and success of students from more disadvantaged demographics. With this, community colleges could stick to helping all students reach favorable outcomes, and everyone benefits.

The study also acknowledges “that a well-designed and thoughtful PFB formula has the potential to encourage positive changes.” However, the authors hope that the research serves “as a cautionary tale for policymakers [that urges] them to carefully consider the unintended consequences of PBF.”

For the full breakdown, from the background to the results on student characteristics and their cumulative performance-based funding, refer to the study here.