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FALL 2011 REPORT

Will We Have to Give Away Our Degrees to Secure State Funding?

This is a rather unusual AAUP Report, since it does not deal directly with academic freedom or shared governance issues. Rather, it deals with a challenge to the professoriate initiated by the Indiana Commission for Higher Education (IHEC). This challenge is associated with what is called “performance funding”, which creates a fundamental conflict of interest for faculty at state supported campuses. As argued below, this conflict between standards and salary may well become most intense in Bloomington.

Performance funding has its origins in a problem faced by the State: Indiana has a very low ranking among the states in regard to the proportion of population holding higher education credentials. This is deemed an impediment to economic growth in today’s world, which it may well be. To change this, the IHEC and the Indiana legislature have introduced performance funding, which rewards campuses that contribute to the solution of this problem.

Performance funding operates by measuring, for each campus, the following factors: degree attainment change measured as a percentage (60% weight), change in successful completion of credit hours measured as a numerical difference (25% weight) and a research incentive (15% weight). Different campuses would appear to have inherent advantages with respect to the second and third of these. The growing campuses have an obvious path to increasing the number of successful credit hours completed and the research oriented campuses would presumably score well on factor 3. Degree attainment, which carries more weight than the other two combined, is viewed as an equal opportunity factor in the formula. It appears that the IHEC and key legislators believe that every campus has the same opportunity to increase the graduation rate, irrespective of what that rate may be at present.

Performance funding was used for the first time in setting the 2011-13 biennium budget for state supported campuses. 5% of higher education funding was allocated using this approach, and there were clear winners and losers. The total IUB budget was cut by 5.5%, much of that attributable to a low overall score on the performance factors. The budgets of ISU, Purdue West Lafayette and Ball State were cut lesser amounts, while Ivy Tech received a double digit percentage increase in its budget.

Where will we go from here? The IHEC has discussed increasing the percentage of funding allocated using performance measures, perhaps to 10% in the next biennium and to higher percentages beyond that. President McRobbie has urge the Commission to reconsider its approach and the legislature did direct the IHEC to evaluate the measures used to structure its performance funding recommendations.

Is it true that every campus has an equal opportunity to increase its graduation rate? That is a fundamental question underlying the performance funding system and should be a focal issue in its evaluation. It seems that those who believe this to be true do not recognize the possibility that some campuses are already doing well in this regard, while others are not. This is not simply a question of whether the current graduation rate is high or low, but whether it is high or low relative to the expected rate given campus characteristics. Comparing the actual rate to the expected rate would provide an alternative framework within which to judge performance.

Those who follow the U.S. News rankings will know that graduation performance is incorporated by just such a comparison of actual and expected rates. One of the interesting things about this is that IUB, which has never been a stellar performer overall in that ranking system, has for years had a graduation rate higher than expected by a double digit percentage. In the 2012 ranking the value is 10% and of the 75 or so institutions above IUB in the national university list, only 2 exceed that measure. It is somewhat strange to see that IUB gets no credit from the State for its graduation rate performance, while in a national context it is a very high performer.

If IUB is already a high performer, is it not reasonable to believe that raising its graduation rate will be difficult, much more difficult than for a campus whose actual graduation rate is below expectations? Academic standards are vested in the faculty. It is the faculty that designs the curriculum, grades the courses and recommends students for graduation. If the State insists on increasing an already “high” graduation rate to secure funding for things like salary increases, the faculty clearly controls the mechanisms which could lead to that. Control of these matters is not vested in a dean, the provost or the president, but with each faculty member in a very distributed way. What will a faculty member do when confronted with the choice of standards vs. salary? Why would it be in the best interest of the State to confront faculty with that choice?

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