Schools Could Take Budget Hit

By Melissa Ludwig

Starting a college class or a university education without finishing it is a waste of time, and at public institutions, a waste of taxpayer money.

That’s the argument behind a $1.8 million grant from the Lumina Foundation for Education, an Indianapolis-based nonprofit, for Texas to ponder an overhaul of its public higher education financing system, tying payouts to the number of students who actually complete a class or degree, rather than the number who simply enroll.

Texas is among seven states sharing $9.1 million, part of larger effort by Lumina to increase the number of Americans with college degrees or credentials. The money will pay for summits that bring together lawmakers, university regents and community college leaders around reform.

“We want to be able to show the country how entire states can come together to generate really big savings to keep tuition down and serve more students,” said Kristin Conklin, a consultant working with Lumina on the grant.

As tuition climbs rapidly in Texas, the pressure is already on for public colleges and universities to operate more efficiently and show results for the money they spend.

Gov. Rick Perry and key Texas lawmakers, for example, have voiced support for an overhaul of higher education funding. But others have bucked the concept because it could mean fewer state dollars for institutions that serve a large number of low-income, first-generation college students, like those in San Antonio.

“I represent families and people who did not have the luxury of having Mommy and Daddy put them though college,” and it takes them much longer to graduate, said Sen. Leticia Van de Putte, D-San Antonio. “I think there has got to be a matrix in there for those that have to work, those that have family circumstances.”

David Gardner, a deputy commissioner at the Texas Higher Education Coordinating Board, said changing the formula actually could help at-risk students by making colleges more sensitive to their needs.

“We don’t expect 100 percent completion; we are just trying to encourage the institution to really work with a student who is dropping courses,” Gardner said.

During the past legislative session, the Coordinating Board shopped a proposal to tie state dollars to the number of students who complete a course, whether they pass or fail, and to the number of graduates the institution produces, no matter where they began their education.

Currently, Texas bases funding on enrollment on the 12th day of class.

Lawmakers opted against the change, but 2011 could be a different story, said Dan Branch, R-Dallas, chairman of the House Higher Education Committee.

“I have been telling college presidents they can look forward to some serious budget challenges,” Branch said. “If I were (they), I would start getting more productive and more efficient now.”

Many are not waiting, having calculated the hit to their budget if the formula should swing in a different direction.

At the Alamo Colleges, the loss could be anywhere from $7 million to $14 million per year, said James McLaughlin, vice chancellor for administration.

“The simple reality is that if we have 100 students at the beginning, we do not have 100 in the end,” McLaughlin said.

At community colleges in particular, students drop out for myriad reasons — because they can’t afford the cost of books or because they are single parents working to feed a family, for instance.

It’s impossible to control students’ circumstances outside the classroom, but a focus on retention and graduation over the past few years already has improved the rates statewide, Gardner said.

In the next few years, it may not be a choice, McLaughlin said. “I think we have to be prepared that this will become an eventuality,” he said.