A new study from the University of Houston College of Education indicates that performance-based funding (PBF) for Texas community colleges could disproportionately penalize colleges that predominately serve students from disadvantaged backgrounds.
Assistant professor Lyle McKinney tracked a cohort of 7,000 students
who entered a large, urban community college system in Texas in fall
2007. Retroactively applying the metrics from the current
performance-based funding model adopted for Texas community colleges
during the last legislative session, his study identified which students
would bring in the most performance-based funding for the college and
which would bring the least.
The current PBF formula awards community colleges $185 per "student
success point," some of which include passing the first college-level
math course, completing 15 semester credit hours, earning a degree or
certificate, or transferring to a university. PBF represents 10 percent
of state appropriations to community colleges.
"What we found was that African-American students, older adults,
students who attend part-time, those who had a GED versus a high school
diploma and those assigned to the lowest level of developmental
education brought significantly less performance-based funding to the
institution," McKinney said. "About 28 percent of the students in our
sample would have actually procured no performance-based funding for the
McKinney says in financially challenging times for higher education,
even well-intentioned institutions may feel pressure to less
aggressively recruit and enroll those students who are less likely to
graduate, or who need additional support to move toward graduation.
"If you are resource-dependent on state appropriations, what is one the most
efficient ways to increase the funding that you get from the state? You
begin to restrict admissions among students who are less likely to
achieve the outcomes in the funding model and you recruit more students
who have a greater likelihood of being successful," he said. "It's
called 'creaming,' and it means institutions have incentive to recruit
only the 'cream of the crop.' That has major implications for
institutions such as community colleges. It is an incredibly troubling
potential unintended consequence of performance-based funding."
McKinney says his study is about improving success among the
community college students of Texas. It includes recommendations to
provide direct funding incentives in the PBF model for the success of
one or more at-risk student groups, to introduce measures that wouldn't
punish institutions for experimenting with new programs to increase
student success, and to better understand the impact of PBF on community
colleges before a larger proportion of state funds are tied to the
"While there is no perfect performance funding model, our study can
help inform policy discussions about the ways in which Texas' model for
community colleges could be improved," McKinney said.
McKinney's study, conducted with Linda Serra Hagedorn/Iowa State
University, is funded by the Greater Texas Foundation. He recently
presented his findings at the Association for the Study of Higher