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March 27, 2009

BOARD TO LAUNCH INITIATIVE ON HIGHER ED FUNDING

National expert to discuss ways to link public dollars to Public Agenda goals

SPRINGFIELD – Follow the money.

That axiom of law enforcement and investigative journalism could become a guiding principle for financing Illinois higher education.

Assisted by a leading national expert on higher education policy and finance, the Illinois Board of Higher Education (IBHE) will initiate an effort to rethink and redesign funding of colleges, universities, and student financial aid in sync with the goals of the Illinois Public Agenda for College and Career Success. Patrick Callan, president of the National Center for Higher Education and Public Policy – the organization that publishes the Measuring Up national report card – will lead a discussion among Board members and constituent advisory committees on innovative approaches to linking state funding to state goals for higher education. The Board will convene at 9 a.m. Tuesday, April 7, at the President Abraham Lincoln Hotel and Conference Center in Springfield.

“The Illinois Public Agenda is our roadmap for the priorities and policies we believe the Board and the state should pursue over the next decade to meet the pressing needs of educational attainment and affordability for our citizens,” Carrie J. Hightman, chairwoman of the Board of Higher Education, said. “Evaluating our funding structure is an essential step to ensuring that we marshal and target our resources to provide affordable access to a high-quality college education.

“We are fortunate to have such a nationally recognized leader as Pat Callan to help guide the Board’s thinking on this vital issue,” the Chairwoman added.

Goal 2 of the Illinois Public Agenda states that the state “will ensure affordability for students, families, and taxpayers.” Among the strategies and specific action steps recommended in the Public Agenda are:

• Develop a funding strategy that explicitly links state appropriations, tuition, and need-based student financial aid.
• Review state need-based financial aid – including coordination with federal tax benefits and aid programs and institutional student aid policies – to increase effectiveness and efficiency.
• Use state funding and regulatory authority to leverage student readiness for college and timely completion of degrees and to encourage operational efficiencies and collaboration among higher education institutions.
• Use state dollars for “performance” incentives to achieve specific state policy goals.

One of the background resources Board members will consider is Financing in Sync, a policy brief published in 2003 by Dennis Jones, president of the National Center for Higher Education Management Systems and a consultant in the development of the Illinois Public Agenda. Jones’ paper listed several “Dos and Don’ts” for state higher education finance policy:

• Do ensure that policies are part of a coherent package, rather than ad hoc, independent decisions.
• Do recognize that a faltering economy that diminishes state revenues also adversely affects students and families, particularly those most in need of state assistance.
• Don’t create funding policy without understanding the adequacy of institutional support.
• Do align at least some state support of institutions with state goals (using performance or investment approaches).
• Don’t burden institutions with sole responsibility for student financial aid.
• Do make funding distinctions among institutions, protecting state funding for those institutions that advance state goals.
• Do recognize that the method of resource allocation is a key factor influencing institutional behavior – a funding structure that is based on course enrollments will produce different results than one that rewards institutions for degree completions.

“These are vital issues for the Board and the higher education community to address,” Chairwoman Hightman said. “The allocation of resources underlies most of the work we do, and especially in these challenging economic times, we must make sure we use public resources prudently to advance the important statewide goals of the Public Agenda.”

The Board’s April agenda inaugurates a new format and structure for IBHE meetings, designed to link actions and discussions to implementation of the Illinois Public Agenda. Each meeting will feature an in-depth discussion by the Board and its advisory committees of an issue or strategy contained in the Public Agenda, followed by appointment of a working group to oversee implementation.