1. National Center for Higher Education Management Systems 3035 Center Green Drive, Suite 150 Boulder, Colorado 80301 A Starting Point for Developing a Performance Funding Model for Illinois Performance Funding Steering Committee Governors State University August 30, 2011

2. Some Givens Dealing only with the performance funding component of the larger financing model for Illinois higher education Performance funding will be implemented with or without new money (?)

3. Design Principles Performance funding aligned with goals as stated in the public agenda Create different models for different kinds of institutions –Research universities, comprehensive universities, community colleges –Encourage mission differentiation –Gives all institutions an opportunity to benefit Include provisions that reward success with underserved populations Keep the driving metrics –Few in number –Clear in intent and presentation Reward continuous improvement rather than achievement of fixed targets Avoid metrics/drivers that can be gamed –Use numbers, not rates

4. Implementation Principles Phase-in Stop-loss – but not hold harmless Have a strategy for ensuring that quality isn’t compromised in the process of increasing degree production

5. Public Agenda Goals 1.Increase educational attainment to match best- performing states –Eliminate achievement gaps by race, ethnicity, socioeconomic status, gender, and disability –Increase number of adults completing a postsecondary credential –Reduce geographic disparities in educational attainment 2.Ensure college affordability for students, families, and taxpayers –Make Illinois one of the five most affordable states in the country to get a college education (continued…)

6. Public Agenda Goals (continued) 3.Increase the number of high-quality postsecondary credentials to meet the demands of the economy and an increasingly global society –Increase the number of people with high-quality postsecondary credentials –Improve transitions all along the education pipeline –Increase the number of postsecondary degrees in fields of critical skills shortages 4.Better integrate Illinois’ educational, research, and innovation assets to meet economic needs of the state and its regions –Boost Illinois into the ranks of the five states with the fastest growing economies

7. Remember Performance funding isn’t the only tool in the policy tool box Not all goals have to be reflected in the performance funding metrics

8. Best Candidates for Inclusion in Performance Funding Model 1.Increase educational attainment to match best- performing states –Eliminate achievement gaps by race, ethnicity, socioeconomic status, gender, and disability –Increase number of adults completing a postsecondary credential –Reduce geographic disparities in educational attainment 2.Ensure college affordability for students, families, and taxpayers –Make Illinois one of the five most affordable states in the country to get a college education (continued…)

9. Best Candidates for Inclusion in Performance Funding Model (continued) 3.Increase the number of high-quality postsecondary credentials to meet the demands of the economy and an increasingly global society –Increase the number of people with high-quality postsecondary credentials –Improve transitions all along the education pipeline –Increase the number of postsecondary degrees in fields of critical skills shortages 4.Better integrate Illinois’ educational, research, and innovation assets to meet economic needs of the state and its regions –Boost Illinois into the ranks of the five states with the fastest growing economies

10. Some Possible Components Comprehensive Four Year Universities –Increase in numbers of baccalaureate degrees awarded –Increases in numbers of baccalaureate graduates who are Hispanic, African American, or Native American Pell/MAP eligible Male Disabled Recipients of degrees in critical needs fields (continued…)

11. Some Possible Components (continued) Research Universities –Increases in numbers of baccalaureate graduates who are Hispanic, African American, or Native American Pell/MAP eligible Male Disabled Recipients of degrees in critical needs fields –Increase in numbers of doctoral degrees awarded –Increase in research expenditures of funds from external sources (continued…)

12. Some Possible Components (continued) Community Colleges –Increases in numbers of individuals who Receive AA degrees Receive industry-recognized high-value certificates requiring a year or more of study Transfer to a 4-year institute after accumulating 36 credits (or number in transfer core) –Increase in numbers of completers who are Hispanic, African American, or Native American Pell/MAP eligible Male Disabled Recipients of degrees in critical needs fields Academically at risk – started in developmental ed Adults – entered college after age 24 –Increase in numbers of students who Successfully complete related college level course after initial placement in developmental ed

13. Suggestions Regarding Implementation Specify by enumeration those institutions to be treated as research universities Create separate criteria for each type of institution –A percent of state general fund appropriations to each Phase in –3% First year –3% additional each year for next 4 years Stop-loss –Cumulative decreases (contributions to pool minus rewards) limited to 5% in first 3 years