Skip to content Skip to footer

Performance-Based Education Budgeting Fails the Test

Performance or outcomes-based budgeting will not advance the goals of higher education.

(Image: School savings via Shutterstock)

Money – how it’s raised, how it’s budgeted and what it buys – has been the silent driver of education reform across this nation for more than a decade. Now, with state funding for public higher education in post-recessionary decline, most institutions have been forced to raise college tuition, cut back on academic programs, privatize services and seek new revenue streams, including from private foundations and corporate sponsors. Insidiously, another “innovation” in education money matters is “performance” or “outcomes-based” funding.

Amid the chatter about top-to-bottom reform in Oregon, one missing link is consideration of its mission. Here’s what the statutes say higher education’s tasks are: to deliver high-quality education, to prepare students for a democratic society and to contribute to the economic, cultural and civic advancement of the state. Years of disinvestment have undermined these aims, as Oregon’s rank of 47 among states in funding attests.

Evidently ignoring both of these points, Oregon’s Higher Education Coordinating Commission (HECC) is charging ahead in a new direction. HECC is tasked with making policy recommendations to the governor and state legislature. Its focus is on the “how” of funding, not “how much.” Championing performance-based budgeting, HECC’s plan for higher education funding is billed as a way to “maximize student success” by making postsecondary education more accessible and affordable – all with an eye toward achieving the state’s aspirational goal that 80 percent of Oregonians obtain a degree by 2025.

HECC argues that this catchphrase, reverberating through the halls of the Oregon State Capitol, represents a more efficient and cost-effective funding model. Evidence for this claim is scarce.

To date, student enrollment has driven public higher education funding. Contrast this to the performance-based budgeting model, which ties funding to student outcomes. While the model focuses on degree completion, retention and job placement, it overlooks several key issues.

Performance funding will undercut investment in instruction, peer mentoring, academic advising and other essential elements of student success. Why? Because performance-based budgeting operates under the guise of efficiency and productivity, but does so by sacrificing quality. This model will drive institutions to balance their budgets with more online courses, the overuse of part-time and adjunct instructors, and larger class sizes. Performance or “outcomes-based” funding also fails to account for the fact that most non-traditional and working adults who attend college take longer to complete their degrees – a fact that will punish institutions fiscally.

If the legislature adopts the outcomes-focused plan, how will student performance benchmarks be measured? The effect is that funding will be cut from institutions whose students acquire new skills and trades without seeking degrees. Oregon’s community colleges, often the best recourse for worker retraining in recessionary times, will be penalized under this funding approach, and so too will 100,000+ Oregon students.

Given these limitations, it is unlikely that performance-based budgeting will move the state’s education aspirations “over the horizon,” as Governor Kitzhaber promised in a recent meeting of his education governance board. The state should instead turn its attention to the real issues in higher education funding. Skyrocketing college tuition, which has forced students to put their educational aspirations on hold, is one such topic worthier of HECC’s attention than artificial performance indicators.

Another critical question more on point is to address the disconnect between Oregon’s chronic underfunding of postsecondary education and its expectations of high performance. Indeed, even in its own recent report, the HECC acknowledged that state funding for higher education had declined by 32 percent since the Great Recession. This state can’t expect Dom Pérignon on a micro-brew budget.

Yes, we really mean it – your gift makes a difference.

Did you know that of the millions of people who read Truthout, fewer than 1 percent make a donation? But even with that small number who give, Truthout is still overwhelmingly donor-funded. Every donation that comes our way makes an outsized impact for every single one of our readers.

If you can find a few dollars here or there to support the independent, always-honest journalism we produce, please consider making a donation. All gifts are tax-deductible and go directly to funding our justice-driven work. Will you give today?