Changes in way Md. pays for higher education not far off, delegate says

ANNAPOLIS — If the University System of Maryland moves to a performance-based funding model for its institutions, college presidents warn that the program should not be one-size-fits-all.

Changing the system’s funding model likely will not be directly discussed again during this session of the General Assembly, Del. John L. Bohanan Jr., D-St. Mary’s, said after a joint hearing last week of the Senate Subcommittee on Education, Business and Administration and the House Appropriations, Education and Economic Development Subcommittee, but changes to the way the state funds higher education are not too far off in the horizon.

The exploration stems from Gov. Martin O’Malley’s stated goal to increase the percentage of Marylanders with associate’s degrees or better from 44 percent to 55 by 2025, Bohanan said.

And last week, a study out of the University of Pennsylvania’s Institute for Higher Education Research said Maryland would have difficulty reaching that goal, in part because its funding model does not take institutional performance into account.

The Lumina Foundation, a group that is seeking to raise the percentage of Americans with advanced degrees, has supplied the state — along with 22 others — with a grant of up to $1 million to help facilitate the policy change. Institutions in Maryland are traditionally funded based on enrollment figures.

But, at least for one day, representatives from the university system appeared willing to consider a performance-based funding model.

“One of the issues is this will not work if there’s not buy-in,” said Bohanan, chair of the Senate subcommittee. “We have a higher level of buy-in than we thought we would have at this point.”

Still, Reginald S. Avery, president of Coppin State University, cautioned that schools like his could be damaged should the state legislature mandate there be performance-based funding, and the criteria to measure that performance is made too narrow.

“I think performance funding will work,” Avery said. “But there are many variables.”

At issue was exactly what would determine a fair measure of a college’s performance. Should a school’s completion rate — the percentage of its students who go on to receive degrees — be the criteria, Morgan State University President David Wilson said institutions that sustain dropouts due to students not being able to pay for their schooling would suffer.

And in the case of community colleges — where students sometimes transfer to four-year schools before completing their associate’s degree — schools could be docked funding should completion rate be the sole indicator of a school’s success.

“Any performance funding [for community colleges] must be admissions based,” said Murray K. Hoy, president of Wor-Wic Community College in Salisbury.

James Applegate, vice president of the Lumina Foundation, said the concerns of the presidents were reasonable, but were not without their solutions. Applegate said similar systems have been put into place in Ohio and Pennsylvania, and both states have shown gains in graduation rates, according to a Department of Legislative Services analysis.

“There are best practices about how to do this,” Applegate said. “There are about nine ways to do it incorrectly.”

But performance-based funding is critical to achieving higher college enrollment and completion rates in Maryland, he said.

“In good times and bad, it needs to be part of base funding,” by the state, Applegate said.

University system Chancellor William E. Kirwan, while wary of the complexity such a funding change might create, said a performance-based method may be a good shift for the system — but only if at least 5 percent of the state’s existing higher education budget is set aside for the allocation.

“I think as a concept, it is the right thing for us to do,” Kirwan said. “The idea that you would reward performance is right. But keeping it simple is not going to be simple.”

“If we move forward with performance funding, I hope we won’t forget enrollment funding. As enrollments grow, institutions need funding so as not to erode” the quality of the education.

According to Bohanan, with no additional money likely to become available for higher education funding, exploring ways to increase achievement with existing funds is critical to improving the output of Maryland colleges.

“We reward performance,” Bohanan said. “It tends to work in our society.”