Higher Education Finance

Incentives to Increase Graduates

The California legislature has decided to implement a performance funding system for the state’s community colleges. The state is interested in increasing the number of graduates from disadvantaged socioeconomic backgrounds. At the same time, the state also wants to reward institutions that graduate more students from high-demand fields such as nursing, engineering technology, biotechnology, and computer technology. The performance funding system will be simple:

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A pot of money will be set aside in the state higher education budget each year for incentive funding.
The number of graduates from low socioeconomic backgrounds at each community college will be totaled.
The number of graduates from high-demand programs at each community college will be totaled.
The total amount of incentive money will be divided by the total number of graduates in the two categories above, establishing a dollar amount per graduate.
Each community college will receive incentive money according to the number of graduates they contributed to the total.
Evaluate the system proposed and express your position on whether it will increase the number of graduates as intended, being sure to support your position with appropriate references. What other impact(s) might this system have?

What challenges or unanticipated consequences do you see with the above system?

This Discussion addresses the following unit learning outcome:

Predict effects of accountability measures on higher education institutions.

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