OutcomesBased Formula Funding for Universities TEXAS HIGHER EDUCATION

Outcomes-Based Formula Funding for Universities TEXAS HIGHER EDUCATION COORDINATING BOARD WEBINAR APRIL 9, 2014

GAIFAC Recommendation – Funding Totals 3 � $235 million in outcomes-based funding pool � OBF pool is equal to 10% of undergraduate formula funding, but: � Is outside of and in addition to the I&O formula � Fund I&O and Infrastructure at requested amounts first $5, 000 M OBF $4, 500 M $4, 000 M $3, 500 M $3, 000 M I&O-Undergraduate, $2, 346 $2, 500 M $2, 000 M $1, 500 M I&O - Graduate, $1, 569 M $1, 000 M $500 M $0 M E&G Support, $734 M OBF - 5. 1% More Funding Equal to 10% of Undergraduate I&O, $235 M Total, $4, 884 M

GAIFAC Recommendation– Success Metrics 4 Total Undergraduate Degrees • Total number of Bachelor’s Degrees awarded by an institution in a given year. Total Undergraduate Degrees by Graduation Rate • Total Bachelor’s Degrees multiplied by the school’s sixyear graduation rate, to incent timely completion. Total Undergraduate Degrees per 100 FTSE • Degrees divided by Full Time Student Equivalents (FTSEs) and multiplied by 100. This aggregate measure adjusts for part-time and transfer students, providing a common framework for comparing degree productivity. At-Risk Undergraduate Degrees • Degrees awarded to students who meet federal criteria for being at high risk for non-completion. Retention Metrics • Points awarded for students who complete their 30 th, 60 th, or 90 th hour at the institution, to incentivize the use of effective persistence policies.

GAIFAC Recommendation – Allocation 5 �Allocate Funds based on: Points earned on the 7 success metrics The average of the three most recent years of data Points scaled statewide Points weighted by institutions Phased-in over three biennia

GAIFAC Recommendation- Allocation 6 � Allocation based on each institution’s percent of statewide total points � Points are based on an average of the three most recent years of performance data Institution Total Points Percent of Total Points Funding (millions) A 100 25 $58. 75 B 125 31 $72. 85 C 175 44 $103. 4 Total 400 100 $235

GAIFAC Recommendation- Point Scales 9 �Scaling adjusts each metrics’ points to ensure comparability and significance in the model Factor Total Undergraduate Degrees By Graduation Rate Per 100 FTSE At-Risk Degrees Retention to 30 Retention to 60 Retention to 90 Total Three. Percent Year Average of Total Scale 5, 800 23. 0% 3, 000 11. 9% 32 0. 1% 3, 500 13. 9% 7, 000 27. 7% 4, 000 15. 9% 1, 900 7. 5% 25, 232 100. 0% Scaled Points (A) 1 5, 800 7 25 7 1. 5 2. 5 4 21, 000 800 24, 500 10, 500 10, 000 7, 600 80, 200 Percent of Total 7. 2% 26. 2% 1. 0% 30. 5% 13. 1% 12. 5% 9. 5% 100. 0%

GAIFAC Recommendation - Weights 10 � Each institution decides how to Weight weight its metrics from a predetermined set of options 0% Total Undergraduate Degrees By Graduation Rate Per 100 FTSE 25% At-Risk Degrees 20% Retention to 30 15% Retention to 60 10% Retention to 90 5% � Each option is used once 25% � Each institution’s weights must total 100 percent � Omit 1 metric – a weight of 0% � Remain in place for 3 biennia Factor 100% Total 100% 25% 20% 15% 10% Total 1 2 3 4 5 5% 0% Value 6 7 Option

GAIFAC Recommendation - Weights 11 � Example Institution Scaled and Scaled Percent Weighted Points of Weight Points Percent (A) Total (B) (A*B) of Total Factor Total Undergraduate 5, 800 7. 2% Degrees By Graduation Rate 21, 000 26. 2% Per 100 FTSE 800 1. 0% At-Risk Degrees 24, 500 30. 5% Retention to 30 10, 500 13. 1% Retention to 60 10, 000 12. 5% Retention to 90 7, 600 9. 5% Total 80, 200 100. 0% 5% 290 1. 8% 25% 0% 25% 20% 15% 100% 5, 250 0 6, 125 2, 100 1, 500 760 16, 025 32. 8% 0. 0% 38. 2% 13. 1% 9. 4% 4. 7% 100. 0%

GAIFAC Recommendation – Phase-in 13 � The difference between an institution’s percent of statewide OBF funding and percent of statewide undergraduate I&O funding can vary no more than 0. 5 percent for FY 16 -17 and 1 percent for FY 18 -19. Undergraduate Instruction and Outcomes-Based Funding (OBF) Operations (UGIO) Formula Percent Funded E 35. 00% D 25. 00% C 20. 00% A 5. 00% B 15. 00% E 35. 00% D 28. 25% C 19. 75% A 2. 50% B 14. 50%

GAIFAC Recommendation– Phase-in 14 OBF 98%

GAIFAC Recommendation – Point Distribution: Statewide 15 Retention to 90 Hours 12. 5% Retention to 60 Hours 12. 8% Retention to 30 Hours 7. 5% Total Undergraduate Degrees 1. 6% by Graduation Rate 30. 6% At-Risk 34. 4%

GAIFAC Example Point Distribution: Regional Institution 16 Retention to 60 Hours 1. 1% Retention to 30 Hours 9. 2% At-Risk 42. 9% Total Undergraduate Degrees by Graduation 3. 5% Rate 15. 5% per 100 FTSE 27. 9% Statewide

GAIFAC Example Point Distribution: Research Institution 17 Total Undergraduate Degrees 1. 5% Retention to 90 Hours 22. 7% by Graduation Rate 43. 5% Retention to 60 Hours 10. 8% Retention to 30 Hours 4. 9% At-Risk 16. 6% Statewide

GAIFAC Recommendation – Next Steps 18 �Considered by full Coordinating Board on April 25 �Request weights from each institution �Conduct a study of the At-Risk Degrees measure �Submit Initial Model to the LBB (November 1) �Update with FY 2014 data �Submit Final Model to the LBB (March 1)

19 Total Undergraduate Degrees Total number of Bachelor’s Degrees awarded by an institution in a given year. � Accountability measure #10 � Number of degrees reported on the CBM 009 – Graduation Report for the fiscal year Fiscal year 2012 includes fall 2011, spring 2012, and summer 2012 reports � Multiple degrees earned by a single student are included � Double Majors are counted as a single degree � Degrees included Baccalaureate Associate of Applied Science (AAS) � Excludes certificates

20 Total Undergraduate Degrees by 6 Year Graduation Rate � 6 -Year Graduation Rate – Accountability measure #9 First-time entering degree-seeking students who enrolled in an minimum of 12 semester credit hours their first fall semester who graduated from the same institution or another Texas public or independent institution after four, five, and six academic years. This metric includes Social Security Number changes submitted on the CBM 00 N. First-time determined by the first-time student flag on the CBM 001. Sources: CBM 001, CBM 002, CBM 009, CBM 00 N � Same Fiscal Year as degrees reported For fiscal year 2012, cohort started in fall 2006 � Includes same and other institutions Total Bachelor’s Degrees multiplied by the school’s sixyear graduation rate � Upper-Level institutions use 3 -Year Completion Rate First-time junior level students transferring in who graduated from the same institution or another Texas public or independent institution after three academic years. UT-Brownsville, TAMU-Texarkana, UH-Clear Lake, UH-Victoria, and Sul Ross Rio Grande. To incent timely completion. � New institutions calculated with parent graduation rate TAMU-Central Texas, TAMU-San Antonio, and UNT-Dallas. � Example Institution Degrees Rate Points A 9, 000 80% 7, 200 B 200 30% 60

21 � Degrees same as the first factor Total Undergraduate Degrees per 100 FTSE Degrees divided by Full-Time Student Equivalents (FTSEs) and multiplied by 100. This aggregate measure adjusts for part-time and transfer students, providing a common framework for comparing degree productivity among institutions with different missions and student bodies. � Undergraduate Full-time student equivalents (FTSE) – Accountability measure #2 Number of semester credit hours (SCH) reported on the CBM 004 – Class Report for the fall of the fiscal year For fiscal year 2012, fall 2011 � Includes state funded undergraduate semester credit hours � Excludes non-state funded and graduate semester credit hours � Undergraduate Semester Credit Hours divided by 15 to convert to FTSE � Example Degrees 4, 930 SCH 255, 000 FTSE (SCH/15) 17, 000 Points (Degrees/(FTSE/100)) 29

22 � One point for each student awarded degrees in the first measure At-Risk Degrees awarded to students who meet federal criteria for being at high risk for non-completion. that meets one or more of the conditions 1. Reported by any institution as a “Pell Grant recipient” in the Financial Aid Database System (FADS) during the last 10 years 2. Earned an SAT or ACT score below the national average 3. 4. Part-Time (taking less than 12 hours) when reported as firsttime in college on the CBM 001 – Student Report General Education Degree (GED) recipients for the last six years Indicators are being a federal Pell Grant recipient, below average SAT/ACT score, part-time student, GED recipient, or entering higher education at age 20 or older. 5. Scores reported on the CBM 00 B – Admissions Report or by the College Board National Averages posted on www. collegeboard. org or www. act. org Data provided by the Texas Education Agency (TEA) upon request 20 or older by date of birth field on the CBM 001 – Student Report when reported as first-time in college Student Received Pell Grant Earned a Below Average SAT or ACT Score First. Time in College and Attended less than 12 A Yes B No C No Received a GED First. Time in College and 20 or Older Points Yes Yes 1 No Yes No No 1 No No 0

23 � 2 - Institution Code 3 - Student Identification Number 6 - Date of Birth 7 - Degree Conferred 8 - Level of Degree or Certificate Conferred 9 - Major At-Risk – Data Elements Degrees awarded to students who meet federal criteria for being at high risk for non-completion. Indicators are being a federal Pell Grant recipient, below average SAT/ACT score, part-time student, GED recipient, or entering higher education at age 20 or older. CBM 009 - Graduation � 2 - Institution Code 3 - Student Identification Number 24 - Application Year 25 - ACT Composite Score 26 - SAT Combined Score � CBM 001 – Student 2 - Institution Code � 3 - Student Identification Number 5 - Classification 6 - Date of Birth 9 - Transfer Student or First-Time-in-College 10 A - Semester Credit Hour Load, On-Campus 10 - B Semester Credit Hour Load, Off. Campus 13 - Semester 14 - Year 31 - Dual Credit Course Semester Credit Hours � CBM 00 N – Student Number Change 2 - Institution Code 3 - Current Student Identification Number 4 - Current Date of Birth 6 - Prior Student Identification Number 7 - Prior Date of Birth � FAD - Financial Aid Database 1 B - FICE 1 D - Student Social Security Number/ID Number 31 A - Federal Pell � CBM 00 B - Admissions TEA GED Data Student Identification Number GED Certification Date SAT and ACT National Averages www. collegeboard. org www. act. org

24 Retention to 30, 60, and 90 Hours Points awarded for students who complete their 30 th, 60 th, or 90 th hour at the institution. To incentivize the use of effective persistence policies. � One point awarded for students successfully completing 30, 60, or 90 hours at the institution as reported on the CBM 00 S – Student Schedule Report Last five years – FY 2012 includes data from fall 2007 to summer 2012 Successful completion reported as A, B, C, D, or Credit/Passed in 24 Prior to summer 2011, students receiving a failing grade are included in counts � All undergraduate students enrolled at the institution � College-level hours earned at the institution currently enrolled Exclude hours earned at other institutions Exclude developmental education hours � Examples Student Hours Earned at the Institution in prior Fiscal Years Hours Earned at the Institution in current Fiscal Year Total Points 1 0 30 30 1 2 21 24 45 1 3 30 30 60 1 4 45 12 57 0 5 60 30 90 1 6 75 30 105 1 7 90 30 120 0 8 29 45 74 2

25 � 2 - Institution Code 3 - Student Identification Number 5 - Classification 6 - Date of birth 18 - Semester Retention– Data Elements � Points awarded for students who complete their 30 th, 60 th, or 90 th hour at the institution. To incentivize the use of effective persistence policies. CBM 001 – Student CBM 00 N – Student Number change 2 - Institution Code 3 - Current Student Identification Number 4 - Current Date of Birth 6 - Prior Student Identification Number 7 - Prior Date of Birth Prior to summer 2011 � CBM 002 – Texas Success Initiative 2 - Institution Code 3 - Student Identification Number 4 - Reporting period 5 - Year 10 A - Semester Credit Hours Completed Summer 2011 and after � CBM 00 S – Student Schedule 2 - Institution Code 3 - Student Identification Number 10 - Semester Credit Hour Value 19 - Developmental Education Course/Intervention Level (value=0) 24 - Course Grade (value=1, 2, 3, 4, 8) 29 - Semester