1. THECB Legislative Agenda: Aligning Funding with Student Success Proposed Outcomes-Based Funding Model for Public Universities Thursday, March 10, 2011 10:30 P.M.

2. THECB Legislative Agenda: Aligning Funding with Student Success Model Mechanics – point calculations The THECB recommendation for outcomes-based funding includes the same basic methodology already employed in the existing Performance Incentive funding model. Points are based on degrees (Undergraduate) Funding is split between the two point calculations Biennial Increase/Decrease Total Three-Year Average

3. THECB Legislative Agenda: Aligning Funding with Student Success 10% of Formula 10% of Formula = Student Success Metrics (Outcomes) ½ ½ allocated based on 2-year over 2-year Increases ½ ½ allocated based on 3-year averages Equation: Average of 2009 & 2010 DegreesMINUS Average of 2007 & 2008 Degrees Equation:SUM 2010, 2009, 2008 Degrees DIVIDED by 3

4. THECB Legislative Agenda: Aligning Funding with Student Success Example of Outcomes Calculation Biennial Increase/Decrease YearDegreesYearDegrees 20104002008200 20092002007100 2-Year Average300150 Increase = 300 – 150 = 150 Metric: Undergraduate Degrees Total 3-Year Average YearDegrees 2010400 2009200 2008200 3-Year Average = (400 + 200 + 200)/3 = 267 417 Total Points = 150 + 267 = 417 Each metric is calculated under the same methodology Points are totaled to determine allocation of 10% of total funding Outcomes funding accounts for 4-years of institutional data

5. THECB Legislative Agenda: Aligning Funding with Student Success Points are calculated on 4 Factors 4-Year Institutions Upper-Level Institutions Above/Below Predicted Degrees At-Risk Degrees Undergraduate Critical Field Degrees Total Undergraduate Degrees SAT or ACT below average Pell Grant recipient Part-time student Initially enrolled at 20 or older High school equivalency certificate recipient in the last 6 years. STEM Nursing Allied Health Math and Science Teacher Certifications Baccalaureate Associates of Applied Science (AAS)

6. THECB Legislative Agenda: Aligning Funding with Student Success Above/Below Predicted Degrees Actual Grad Rate minus Predicted Grad Rateequals Differencetimes Cohortequals Above/Below Predicted 90% minus 80%equals 10%times 2,000 Studentsequals 200 Degrees Above formula example

7. THECB Legislative Agenda: Aligning Funding with Student Success Predicted Graduation Rate Multiple regression model Dependent Variable = 6-year Graduation Rate Independent Variables - 4-Year Institutions Pell Recipients Top 10 Percent high school graduates Independent Variables - Upper-Level Institutions Pell Recipients Credits Attempted in the last two years

8. THECB Legislative Agenda: Aligning Funding with Student Success Predicted Graduation Rate Multiple regression model