Performance Based Funding

Florida A&M University from State Capitol, Tal...

As a professor at Florida A&M University, I am rather familiar with performance based funding in higher education. While performance based funding is being considered or applied in numerous states, I will focus on my adopted state of Florida (it is also present in my home state of Maine).

On the face of it, performance based funding can sound like a good idea: state universities are funded based on performance, so that good performance is rewarded and poor performance is not (or punished). As a competitive athlete (though less so with each passing year), I am accustomed to a similar model in running: those who run better at races get rewarded and those who run poorly typically go home with nothing (other than the usual race t-shirt and perhaps some bagel chunks). This model seems fair—at least in sports. Whether or not it is right or sensible to apply it to education funding is another matter.

One obvious point of concern is whether or not the standards used to judge performance are fair and reasonable. In Florida, the main standards include the percentage of graduates who have jobs, the average wages of those graduates, the cost of getting the degree, the graduation rate within six years, the number of students getting STEM degrees (STEM is hot now), and some other factors.

On the face of it, some of these standards are reasonable. After all, a university would seem to be performing well to the degree that the students are graduating after paying a reasonable cost and getting well-paying jobs. This, of course, assumes that a primary function of a university is to create job-fillers for the job creators (and some job creators). In the past, the main factors for determining funding included such things as the size of the student population and what resources would be needed to provide quality education. Universities were also valued because they educated people and prepared people to be citizens of a democratic state. But, now that America appears to be an oligarchy, these values might be obsolete.

Another point of concern is that the competitive system in Florida, like most competitive systems, means that there must be losers. To be specific, Florida has nine state universities competing in regards to performance based funding. The bottom three schools will lose roughly 1% of their funding while the top six will receive more money. This means that no matter how well the nine schools are doing, three of them will always be losers.

This might be seen as reasonable or even good: after all, competition (as noted above) means that there will be winners and losers. This can be seen as a good thing because, it might be argued, the schools will be competing with each other to improve and thus all will get better—even the losers. This, obviously enough, seems to bring a competitive market approach (or Darwinian selection) to education.

The obvious question is whether or not this is a proper approach to higher education. The idea of public universities fighting over limited funding certainly seems harsh—rather like parents making their nine children fight over which six gets extra food and which three will be hungry. Presumably just as responsible parents would not want some of their children to go hungry because they could not beat their siblings, the state should also not want to deprive universities of funding because they could not beat their fellows.

It might be contended that just as children could be expected to battle for food in times of scarcity, universities should do the same. After all, desperate times call for desperate measures and not everyone can thrive. Besides, the competition will make everyone stronger.

It is true that higher education faces a scarcity of funding—in Florida, the past four years under Rick Scott and a Republican legislature have seen a 41% cut in funding. Other states have fared even worse. While some scarcity was due to the economic meltdown inflicted by the financial sector, the scarcity is also due to conscious choice in regards to taxing and spending. So, going with the analogy, the parents have cut the food supply and now want the children to battle to see who gets a larger slice of what is left. Will this battle make the schools stronger?

Given the above, a rather important point of concern is whether or not such performance based funding actually works. That is, does it actually achieve the professed goal of increasing performance?

Since I serve on various relevant committees, I can say that my university is very concerned about this funding and great effort is being made to try to keep the school out of the bottom three. This is the same sort of motivation that the threat of having one’s food cut provides—the motivation of fear. While this sort of scenario might appeal to those who idealize the competitive model of natural selection, one obvious consequence is that the schools that fall into the bottom three will lose money and hence become even less able to compete. To use the food analogy, the children that lose the competition in the first round will have less food and thus be weaker for the next battle and so on. So, while “going hungry” might be said to motivate, being hungry also weakens. So, if the true goal is to weaken the bottom three schools (and perhaps ultimately destroy them), this would work quite well. If the goal is to improve education, things might be rather different.

It might be countered that the performance based funding is justified because, despite my argument, it will work. While academics are often accused of not being “practical” or in “the real world”, we do tend to do a reasonably good at figuring out whether or not something will work. After all, studying things and analyzing them is sort of what we do. In contrast, politicians seem to be more inclined to operate in “realities” of their own ideologies.

David Tandberg of Florida State University and Nicholas W. Hillman of University of Wisconsin-Madison recently published a study assessing the effectiveness of performance based funding. They concluded that performance based funding “more often than not” failed to effect the completion of degrees. Of considerable concern is that when it did have an effect it tended to lower graduation rates. Assuming this study is accurate, performance based funding (at least as implemented) is ineffective at best and likely to actually negatively impact the professed goals.

It should be noted that Florida State University is very safely in the top six schools, so Tandberg is presumably not motivated by worries that FSU will fall to the bottom. The study, can, of course, be challenged on the usual grounds for critically assessing a study—but mere accusations that professors must be biased or that academics are incompetent hold no water.

Since I am a professor at Florida A&M University, I might also be accused of bias here.  FAMU is an HBCU (one of the historically black colleges and universities) and has long had a mission of providing educational opportunities to students who have faced severe disadvantages. While overt racism is largely a thing of the past, FAMU students rather often face serious economic and preparatory challenges (thanks largely to poverty and segregation) that students from other backgrounds do not face. Some of my best students face the serious challenge of balancing part or even full-time work with their academic lives and this can be very challenging indeed. Because of this, students often take longer to graduate than students at other state universities—especially those whose students tend to come from more affluent families. These economic disparities also impact the chances of students getting jobs when they graduate as well as affecting the salary paid in such jobs. Roughly put, the effects of long-standing racism in America still remain and impact my university. While FAMU is working hard to meet the performance standards, we are struggling against factors that do not impact other schools—which means that our performance in regards to these chosen standards might be seen as lacking.

As might be imagined, some will claim that the impact of past racism is a thing of the past and that FAMU should be able to compete just fine against the other schools. This would be ignoring the reality of the situation in America.

Performance based funding of the sort that currently exists fails to achieve its professed goals and is proving harmful to higher education and students. As such, it is a bad idea. Sadly, it is the reality.

 

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