Report: Restricted Access, Lower Academic Standards Common Impacts of State Performance Funding Policies

By Brittany Hackett, Communications Staff 

State performance funding polices often result in unintended impacts on higher education institutions, including restrictions on admissions and weakened academic standards, according to a recent study from the Community College Research Center.

For the study, the authors focused on three states with performance funding policies– Indiana, Ohio, and Tennessee. They conducted telephone interviews with a total of 222 institutional administrators at nine community colleges and nine universities within the states, discussing the actual and potential unintended impacts of the policies on students and institutions. 

The interviews unveiled “frequent” reports of unintended impacts from the policies, the most common of which was restricting admissions of less-prepared students to community colleges and universities. Twenty-seven interviewees reported that this particular impact had already occurred on their campus, with an additional 41 reporting that is was a possible future impact.

Other commonly cited impacts included: 

  • Weakening of academic standards (59 interviewees);
  • Compliance costs (20 interviewees);
  • Lessening of institutional cooperation (14 interviewees); 
  • Decreased staff morale (11 interviewees); 
  • Less emphasis on missions not rewarded by performance funding (nine interviewees); and 
  • A decrease of faculty voice in academic governance (seven interviewees).

The institutions in the study who reported restricting admissions as an impact of performance funding said it is done so in various ways, including raising admission requirements, using targeted student recruitment, and decreasing the number of “conditional student admits” they allow. 

The study’s authors note that the impact of restricted admission of less-prepared students is “problematic” for institutions that have traditionally been open access or serve low-income and minority students, particularly in urban and rural areas.

Furthermore, practices like raising the minimum requirements for standardized test scores and GPAs “would reshape who enrolls in public institutions of higher education” and “would favor better prepared and more advantaged students to the detriment of minority and low-income students and students who are not as well prepared by their secondary schools,” the authors state.

In their conclusion, the authors note that the results from their interviews should lead to serious consideration of how unintended outcomes from performance funding policies can be avoided. “Policymakers must make sure that any positive effect of performance funding programs on student outcomes do not come with sizeable unintended negative impacts,” they add.

In particular, states should “reduce [the] temptation” of institutions to restrict admissions in order to improve their performance on state metrics. States should also avoid making comparisons between institutions that are different in mission and student population, the report said. NASFAA has made a similar observation as it pertains to the federal Postsecondary Institution Ratings System (PIRS) being developed by the Obama administration. 

The authors conclude by noting that “the use of meaningful metrics need not come at the expense of quality and success; as more states turn to performance funding as a means of increasing the efficiency and effectiveness of public higher education institutions, we urge policymakers to consider the concerns of higher education personnel … and take steps the guard against unintended outcomes.”


Publication Date: 11/21/2014

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