All win – more or less – under new high ed funding model

The proposed new formula for funding Colorado’s public colleges and universities would give every institution an increase in 2015-16, but some campuses would gain more than others.

That’s because the model would divvy up funding in a substantially different and more defined way than has been used in the previous years, when campus financial support was based on past funding, political jockeying and legislative compromise over how much money was left over in the state budget for colleges.

Creation of the formula was mandated by a new law, House Bill 14-1319, that seeks to make higher education finance more transparent and to give colleges “performance funding” for how well they do in retaining and graduating students, among other factors.

Another goal of the law – an aspiration mirrored in the 2012 higher education master plan – is to increase the recruitment, retention and graduation of low-income and minority students.

That law sparked a summer of intense work by the Department of Higher Education, assorted advisory committees and outside consultants. All that work came to fruition this week with approval of the model by two key advisory groups.

The mood was upbeat Friday at the final meeting of the Executive Advisory Group, one of the panels that reviewed the model.

“We’re really shooting for the stars with this one. This is going to be an example a lot of other states are going to look to,” said Lt. Gov. Joe Garcia, who’s also executive director of DHE.

Garcia also said the plan has “a great deal of focus on affordability … targeted toward low-income and minority populations.”

And, Garcia said, the new model should be “more transparent for the public. … We hope it will lead to more public support for funding higher education going forward.”

The next stop for the plan is review and approval by the Colorado Commission on Higher Education at its Dec. 4 meeting. After that the plan will be subject to the uncertainties of legislative review and the annual budget process.

Here’s how the model would work, based on Gov. John Hickenlooper’s 2015-16 budget request for higher education, which overall proposes a 10 percent increase.

  • The full appropriation for higher education would be $665 million.
  • After money is be taken off the top for “specialty education programs” – CU medical programs, CSU veterinary programs, two area community colleges and vocational schools – $525.6 million would be left for distribution through the new formula.
  • Of that, $294.5 million – 56 percent – would be distributed as tuition discounts for resident undergraduate students, known as the College Opportunity Fund stipends. (The new law requires that at least 52.5 percent of funding be distributed in this fashion.)
  • Of the remaining amount, $138.6 million would be distributed to colleges based on factors related to what’s called their “role and mission,” which includes factors such as size, numbers of low-income students, costs of academic programs, location and other attributes.
  • $92.4 million would be distributed among campuses based on their performance, including such factors as graduation and retention of all students, graduation and retention of low-income and underrepresented students and number of degrees and certificates issued in STEM and medical disciplines. Distribution of these funds also would be weighted to account for differences between small and large campuses.

Hickenlooper’s proposed budget also includes some extra funding intended to compensate colleges for a legislative requirement that tuition increase no more than 6 percent in 2015-16 and to provide extra funding for campuses that would receive the smallest increases under the formula. That last measure is intended to ensure that no college receives a funding increase of less than 10 percent in 2015-16. The administration is proposing such transition funding for five years.

Under the formula, Metropolitan State University would receive an increase of more than 16 percent and Fort Lewis College in Durango would get 13.2 percent. At the low end, the University of Northern Colorado would receive only 2.9 percent more. Other colleges and systems would receive increases of between 8 and 11 percent. (The percentage increases are based on the model’s calculations. But the law stipulates that no institution will receive more than a 15 percent increase nor less than a 5 percent hike, so that requirement would override the calculation.)

DHE staffers said Metro and Fort Lewis would benefit because of relatively high numbers of low-income and underrepresented students, while UNC’s increase would be smaller because it has fewer of those students. But, the transition funding would bring UNC and some other colleges up to a 10 percent increase in 2015-16.

While there is widespread support for the formula, some members of the Executive Advisory Group noted that the situation could be much different in years when state funding is flat or is cut.

Jean Adkins, an administrator at Colorado Mesa University in Grand Junction, noted, “If we did not get a 10 percent increase … it would look very different.” She added, “When there is no new money coming in, it is rural Colorado that will get hurt.”

Garcia acknowledged that potential problem, saying, “If you’re in a flat funding year, this [model] looks kind of ugly. That is something that is a long-term concern for every institution.”

The new model also doesn’t change one key fact about higher education funding, that parents and students will continue to pay the bulk of college costs. State funding cuts in recent years have forced colleges and universities to rely on tuition increases to keep the doors open. Tuition revenue currently provides roughly 75 percent of college revenues.