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Financing Community Colleges: Policies, Incentives, and Language Matter. Nancy Shulock Achieving the Dream State Policy Meeting Atlanta, GA February 5, 2008. The California context Finance policy and incentives matter for student success A new approach: “Invest in Success”. Overview.

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Financing Community Colleges: Policies, Incentives, and Language Matter

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financing community colleges policies incentives and language matter
Financing Community Colleges: Policies, Incentives, and Language Matter

Nancy Shulock

Achieving the Dream State Policy Meeting

Atlanta, GA

February 5, 2008

California State University, Sacramento

The California context

Finance policy and incentives matter for student success

A new approach: “Invest in Success”


California State University, Sacramento

california s performance is lagging
California’s Performance is Lagging
  • Preparation
    • 35th and 49th in high school students taking advanced math and science
    • Bottom 1/5 in 8th gradersscoring “proficient” in all subject areas of the NAEP
  • Participation
    • 40th in direct to college from high school
    • 48th in full-time college enrollment
  • Completion
    • 47th in BA degrees per 100 undergraduates enrolled
    • 46th in degrees/certificates awarded per 100 students enrolled in 2-year colleges

California State University, Sacramento

Percent of Adults with an Associate Degree or Higher by Age Group—Leading OECD Countries, the U.S., and California

Source: Organisation for Economic Cooperation and Development, Education at a Glance 2007; Not shown on the graph are Belgium, Norway, Ireland and Denmark, which also rank ahead of the U.S. on attainment among young adults (attainment is increasing for younger populations as in the other countries)

California State University, Sacramento

california is becoming less educated than other states rank among states in with college degrees
California Is Becoming Less Educated Than Other States (Rank Among States in % with College Degrees)

California State University, Sacramento

california community college facts
California Community College Facts

Size and Governance:

  • 109 community colleges in 72 districts
  • 2.5 million students per year
  • Over 70% of public undergraduates
  • Locally elected boards
  • Collective bargaining – local contracts
  • Highly regulated
  • Highly politicized


  • Lowest fees in the nation
  • Low funding per student
  • High participation rates
  • Low completion rates

California State University, Sacramento

tuition fees in 50 states
Tuition/Fees in 50 States

California State University, Sacramento

our student success research
Our Student Success Research
  • Rules of the Game – February, 2007
    • Policies are impeding completion – especially finance policy
  • Beyond the Open Door – August, 2007
    • We know what works: student success strategies
    • Patterns that are more/less successful in the CCC
  • Invest in Success – October, 2007
    • Finance policies are misaligned with priorities
    • A new funding approach can reward performance fairly
  • It Could Happen – Forthcoming, February, 2008
    • Reform is possible but requires finance policy reform and external pressure on system to change

California State University, Sacramento


Incoming CCC Students


Policies to

Promote Access

520,407 Students

Non-Degree-Seekers, 40%

Degree-Seekers, 60%

206,373 Students

Basic Skills, 9%

Personal Enrichment, 42%

314,034 Students

Policy Barriers

to Completion

Job Skills, 49%

Complete Certificate, Degree or Transfer within 6 Years, 24%

75,682 Students

238,352 Students

Do Not Complete within 6 Years, 76%

California State University, Sacramento

age and race ethnicity matter
Age and Race/Ethnicity Matter

Rates of completion:

  • 27% for students age 17-19 at enrollment
  • 21% for students in their 20s
  • 18% for students in their 30s
  • 16% for students age 40 or older
  • 33% for Asian students
  • 27% for white students
  • 18% for Latino students
  • 15% for black students

California State University, Sacramento

enrollment patterns matter especially full time
Enrollment Patterns Matter – Especially Full-Time

California State University, Sacramento

community college reaction
Community College Reaction

“This is another typical ‘university view’ of our community colleges written by people who have no experience in our institutions.”

Authors seek to “remake community colleges into another elite university system.”

“It is clear that the authors have little or no understanding of our colleges or our students and their work is not helpful….”

“The study is insulting to community colleges.”

California State University, Sacramento

support emerges
Support Emerges

“The resistance you're experiencing is an indication of how badly the message needed be delivered.”

“There are a number of us who resent the defensive manner in which the system responded to your report. You have put critical issues on the table that we have ducked for a long time because of political timidity.”

“Please accept my commendation for your courage in thinking out loud about issues that have for years been repressed and avoided by the systematic work of institutional defensive routines.”

California State University, Sacramento


What Finance Policies Impede Student Success?

  • Appropriations
    • Enrollment-driven funding
  • Restrictions on college use of resources
  • Fee policy
    • Low fees for all
    • Fee revenue is an offset to state funding
  • Financial aid
    • Low use of financial aid
    • No incentives for students

California State University, Sacramento

base appropriations enrollment driven
Base Appropriations (Enrollment-Driven)

California State University, Sacramento

categorical program matriculation
Categorical Program: “Matriculation”

California State University, Sacramento

restrictions on spending 50 law
Restrictions on Spending: 50% Law

California State University, Sacramento

financial aid focus on fees instead of affordability
Financial Aid Focus on Fees, Instead of Affordability

California State University, Sacramento

key reforms require changes to funding from ftes to success
Key Reforms Require Changes to Funding: From FTES to Success
  • Mandatory assessment/placement
  • Mandatory orientation
  • Enforced prerequisites
  • Integrated academic/student services
  • Remove spending requirements
  • Increase fees for non-needy students

California State University, Sacramento

the question that continues to perplex american higher education
The Question that Continues to Perplex American Higher Education

How can we best incorporate measures of success into funding decisions?

California State University, Sacramento

how traditional performance budgeting has typically not worked
How Traditional Performance Budgeting Has Typically (Not) Worked
  • Make no changes in basic funding incentives
  • Create a small performance pot – preferably new money of 2-5% of total
  • Select measures (usually controversial)
  • Select targets (necessarily arbitrary and controversial)
  • Mete out rewards (or not - what to do with low performers?)
  • Performance problems not solved
  • Performance funds get cut
  • Everyone is frustrated (or worse)

California State University, Sacramento

what s wrong with this picture
What’s Wrong with this Picture?
  • Performance has become marginalized - an “add on” responsibility to basic operations
  • Set up to fail – how can 2-5% of total funding solve performance problems?

California State University, Sacramento

invest in success
Invest in Success
  • Not AFTER colleges are funded “to operate”
  • Incentives for success are built into core funding
  • Re-think what is “workload”
    • Enroll students for a full term
    • Serve disadvantaged students
    • Get students to threshold # units
    • Get students to complete, or advance in, remedial work
    • Get students to complete programs

California State University, Sacramento

trade offs and challenges
Trade-offs and Challenges

Design Issues:

  • Which workload factors to include – new incentives
  • Importance of each factor – the “stability” question
  • How to use the factors fairly
  • Phase-in time period

Institutional Culture:

  • Focus on funding students, not institutions
  • Ideological resistance to rewarding performance
  • Baggage from failed performance budgeting

California State University, Sacramento

lessons we have learned
Lessons We Have Learned
  • Incentives are powerful – we get exactly what we design through policy
  • Changing policies – needs external support
  • Performance funding needs a new language
  • “Invest in Success” – so far, so good

Copies of reports


Request hard copies:

California State University, Sacramento