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Five years ago, Colorado lawmakers changed the way the state funds public colleges and universities. Instead of sending money based mostly on enrollment, the plan was to dole out money based on eight metrics that include how well institutions help students stay in school and get to graduation.
But some college leaders say that formula hasn’t worked as intended and instead valued year-over-year funding stability rather than changes that direct money to schools helping more students.
Now, as part of a regular five-year review, state lawmakers are making incremental updates they say will help drive more money to colleges based on how well they educate students. The changes would expand metrics to include whether schools educate more students who enroll part-time or have a greater number of transfers.
Colorado enacted its current iteration of a performance-based funding formula model in the 2021-22 school year. The formula is a set of metrics to direct increases in state funding based on specific, measurable outcomes, including whether a student graduates on time and schools enroll a higher percentage of certain students.
Colorado Commission on Higher Education Chair Jennifer Walmer, whose board crafted recommended updates in House Bill 1345, said she heard many complaints from schools that the formula doesn’t truly reward schools for their student outcomes. But she also said the commission didn’t want to completely reimagine the formula when the state faces budget challenges and the federal government has cut higher education spending.
“I do think that there are mechanisms and flexibilities in the new formula that, with additional resources, could help drive more performance,” Walmer said.
The bill would keep parts of the 2021-22 funding formula intact, including metrics that help determine how much more money schools get for student enrollment, retention, and graduation.
But the proposal would make key additions to the formula in the 2027-28 school year that would better reflect the myriad of ways students interact with schools that weren’t considered in the current funding model.
These include new definitions that better account for transfer students, as well as a provision to ensure part-time students get counted toward funding. Walmer said part-time students make up about half of higher education enrollment statewide.
The proposed formula also creates other levers that lawmakers can use to funnel even more state funding to schools based on their performance on the metrics of student enrollment, retention, and graduation. This means lawmakers would have the ability to reward excellent performance to drive bigger funding changes, Walmer said.
The bill would also alter the name of the formula to “results-informed funding.”
“I do believe that the mechanism changes that we’re making will better serve and better reflect Colorado students,” Walmer said.
The bill has been met with reserved optimism from several higher education leaders.
Colorado Mesa University President John Marshall said he believes the new formula could help solve some of his biggest concerns about how the state distributes money, including how much some schools get in state funding versus others.
Metropolitan State University of Denver President Janine Davidson said the proposed formula updates better account for different types of students, including those that enroll part-time. She said she’s supportive of the changes and hopes lawmakers place a focus on institutions that have been hurt by previous iterations of the funding formula.
She added the state also must boost state funding for higher education institutions. She said a lack of investment in colleges and universities has led to challenges, such as having a group of student advisors at her school that are far smaller than many peer institutions in other states.
“Colorado is not funding higher education,” she said. “And we remain at the bottom.”
House Speaker Julie McCluskie, a Dillon Democrat sponsoring the bill, said during a committee hearing on the bill last week that she believes the proposed funding formula update will better help the state reward schools for helping students.
But she also agrees lawmakers must adequately fund higher education if the formula is to work as intended.
“I do think that we continue to fall short,” she said.
The bill passed its first hearing in a House Education Committee last week and will next be heard on the House floor. If passed, the Senate would need to approve the bill before sending it to Gov. Jared Polis.
Other sponsors include state Senate President James Coleman, Republican Sen. Cleave Simpson of Alamosa, and Democratic Rep. Eliza Hamrick of Centennial.
Jason Gonzales is a reporter covering higher education and the Colorado legislature. Chalkbeat Colorado partners with Open Campus on higher education coverage. Contact Jason at jgonzales@chalkbeat.org.
