Funding Formula Fracas

Study says Washington State's performance funding formula has not improved completion rates at two-year colleges, but officials at the system point to data that say otherwise.

January 14, 2015

Washington State’s performance-based funding formula has failed to move the needle on community college student completion rates, according to a newly released research paper. But officials at the state’s two-year college system are contesting the study’s findings.

Begun in 2006, Washington’s Student Achievement Initiative is considered to be one of higher education’s best and most extensive performance-funding models. It ties student retention and graduation rates -- as well as factors like class completion in mathematics -- to state support.

The researchers chose to analyze the formula’s impact because it is a well-respected version of an idea that has caught on among state and federal policy makers.

“Considering the popularity of Washington’s performance funding model, we are surprised the impacts on associate’s degree productivity are so modest,” wrote the study’s co-authors, who are Nicholas Hillman of the University of Wisconsin at Madison, David Tandberg of Florida State University and Alisa Hicklin Fryar of the University Oklahoma.

The researchers used data from the U.S. Department of Education’s Integrated Postsecondary Data System (IPEDS), as well as other sources. They looked at how the state’s 34-campus community and technical college system stacked up against several different comparison groups from 2002 to 2012. Comparisons included similar data for community colleges in neighboring states, across the region and a national sample.

The colleges in Washington showed no “systematic” increase in student retention or in the production of associate degrees, according to the study, which the American Educational Research Association published today.

“We found that the performance of Washington community and technical colleges was, on average, often not distinguishable from the performance of colleges in other states that were never subject to similar accountability policies,” the researchers wrote.

Short-term certificates bucked the trend, however. The study found noticeable growth in the issuing of certificates that are designed for students to earn in a year or less. Those credentials hold little value in the labor market, according to the researchers.

“The findings over all tip toward being moderate at best,” Hillman said in an interview. He added that short-term certificates are the “quickest and easiest way to benefit from the performance model.”

Hillman has written other research papers that identified problems with performance-based formulas. He said the latest study adds to questions about the trendy policies.

“The adoption of performance funding is a politically convenient strategy,” said Hillman, who discussed the research in a web video. “But we need to have a clear, convincing theory of action behind the policy.”

Pushing Back

Officials with the Washington system took issue with the study. They said the three researchers dismissed a substantial gain in associate-degree production in the state, which has continued to pick up since 2012.

“There have been significant gains in the recent period, especially coming out of the recession,” said Jan Yoshiwara, deputy executive director of education for the Washington State Board for Community and Technical Colleges.

One problem with study, said Yoshiwara and David Prince, the board’s director of policy research, is its reliance on IPEDS data, which is notoriously limited in capturing an accurate view of community college graduation rates. For example, the federal database includes only first-time, full-time students, who are hardly the norm at community colleges.

The researchers did not use IPEDS for their measure of graduation rates, however. They included completion numbers for all students. (Note: This paragraph has been added to correct a reference to the study's methodology.)

Yoshiwara and Prince also said the study failed to capture the recent uptick in degrees earned. The paper noted that performance-based funding appeared to boost degree production in 2011 and 2012. That trend has continued, according to data from the board.

Compared to five years ago, the system is awarding 29 percent more applied associate degrees. While that number has been flat during the last few years, other associate degrees, such as transfer degrees, have been up.

Other completion-oriented indicators, which were not included in the study, are looking good, system officials said. For example, more students are completing college-level math.

“They had a limited picture,” Yoshiwara said of the research.

She also took on the assertion that short-term certificates are not valuable. While this type of credential is controversial, some research has shown that they can pay off. And many of the short-term degree programs in Washington are “stackable,” meaning they are designed to be part of a longer arc toward earning a degree.

“All certificates are not created equally,” Yoshiwara said. “We’re focusing on ones that are building blocks to associate degrees.”

Price also said that many of the system-issued short-term certificates that the federal database captured are in nursing. Rather than being a terminal credential, those certificates are requirements for more extensive academic programs.

The Lumina Foundation has been a powerful proponent of performance-based funding and, more broadly, efforts to increase degree production. Sean Tierney, a strategy officer with the foundation, said the new study “strongly vindicates” the effectiveness of performance formulas in helping more students succeed.

In particular, Tierney pointed to the paper's finding of a recent uptick in associate degrees. “The study is very positive for outcomes-based funding,” he said.


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