[PPT] - Outcomes Based Funding Update HECC FEBRUARY FULL COMMISSION MEETING PowerPoint Presentation

SLIDE 1

Brian Fox, Administrator, Public University Budget & Finance

2/12/2015

Outcomes Based Funding Update

HECC FEBRUARY FULL COMMISSION MEETING

SLIDE 2

2

OBF Technical Workgroup (TWG) formed in May, 2014 University Presidents, HECC Commission and staff leadership discus TWG Principles (6/5/14) Discussion & status updates on OBF

With the Subcommittee (7/3/14, 10/2/14, 11/6/14,

12/4/14, 1/26/15, 2/5/15)

With the full Commission (6/12/14, 9/11/14, 2/12/15)

PROCESS

SLIDE 3

3

 Use existing States’ models and literature to create an OBF model that builds from others yet meets Oregon’s unique institutional context  Meet the principles articulated in May

Reflect HECC strategic plan and OEIB Equity Lens
Focus on student access and success with an emphasis on underrepresented

populations

Encourage high demand/high reward degrees
Recognize/reward differentiation in institutional mission and scope
Use clearly defined, currently available data
Maintain clarity and simplicity
Utilize phase-in period to ensure stability, beginning with 2015-17 biennium

 Develop functional model mechanics  “Tee-up” model and policy questions for Commission to endorse  Reconvene to develop implementation plan

WORKGROUP’S PROCESS & OUTCOMES

SLIDE 4

4

 6/6: Review principles and previous OUS effort; hear from consultants

n national landscape and best practices

 7/7: Review background material, academic and policy literature, scope conversation; review current PUSF framework  9/22: Campuses submit/rank outcome measures/metrics; discuss academic quality; group determines model inputs

Degrees
Student sub-population success
Priority degree types

 11/21: Review and adjust proposed model mechanics  12/1: Discuss weighting structures recommendation  12/19: Develop proposed weighting structure range to support Commission/HECC staff recommendation  1/14: Discuss weighting structure and scenarios  1/23: Discuss transition principles and develop transition structures  2/6: Discuss feedback from F&A Committee  2/9: Discuss staff Weighting Factor Recommendation

TWG MEETI NGS

SLIDE 5

5

Review OBF Process & Outcomes Review OBF Model Structure Establish HECC guidance relative to staff policy recommendations, including

OBF/SCH split
Cost Weighting of SCH & Degrees
Weight factors
Degrees by level – cost weighted
Student subpopulation focus
Priority degrees
Phase-in principles

DI SCUSSI ON GOALS

SLIDE 6

6

Amount Allocated: $52,808,152 Amount Allocated: $235,781,203 Amount Allocated: $94,312,481 FY15 $16,090,954 $19,788,876 $88,781,387 $59,716,834 $16,395,459 $52,539,257 $17,094,584 SL: must be less than 0%

0.0%

$270,407,351 SG: must be Greater Than 6.73%

0.0%

Degree Level Weight Baccalaureate Degrees 2.0 Masters Degrees 1.0 Doctorate Degrees 1.4

Professional Degrees

1.0

Graduate Certificates

0.2 FY14 Actual FY14-FY15 Act. FY15 Actual FY14-FY15 OBF FY15 OBF Student Populations Resident Bachelor's Only Weight 16,090,954 $ 0.0% 16,090,954 $

100.0%
$

1

0.8

19,788,876 $ 0.0% 19,788,876 $

100.0%
$

2

1.0

88,781,387 $ 0.0% 88,781,387 $

100.0%
$

3

1.1

59,716,834 $ 0.0% 59,716,834 $

100.0%
$

4 1.2

16,395,459 $ 0.0% 16,395,459 $

100.0%
$

5 0.0

52,539,257 $ 0.0% 52,539,257 $

100.0%
$

6

0.0

17,094,584 $ 0.0% 17,094,584 $

100.0%
$

7

0.0

270,407,351 $ 0.0% 270,407,351 $

100.0%
$

8

0.0 9 0.0 10 0.0

Area of Study (All Degrees) Weight STEM 1.2

Bilingual Education

1.5

Health

1.2

Other1

1.0

Other2

1.0 Area of Study (All Degrees) Included in Mission Base $/SCH

Dual Credit

50.00 $

0.0% 0.0% 0.0% 0.0% 0.0%

% of Total Appropriations

1.7% 3.7% 1.9% 0.4% 0.4%

% of Total Appropriations

4.9% 1.7% 0.1% 2,366 446 175 1,374

Number of Students Total

2,813 2 886

5,771

1,630 122 5

Number of Students Total

Yes

No

96,747,156 $

18% Stop Loss/Stop Gain Prior Year Total Allocation Total: Portland State University Oregon State University University of Oregon Western Oregon University Southern Oregon University Average Value (Degree Allocation Only)

7,853 $

% of Total Appropriations

33.5%

Number of Degrees Total

12,320

Western Oregon University Total: Eastern Oregon University Oregon Institute of Technology Oregon State University Portland State University Southern Oregon University Stop Loss/Gain Needed?

Outcomes Allocation

803

$

Dollars Allocated per occurence (All levels)

2,431 $ 10,780,377 $ 5,578,914 $ 1,074,032 $ 1,102,518 $ 14,028,413 $ 4,953,135 $ 3,039 $ 408,912 $ 3,343 $ 16,409 $ 3,646 $

Higher Education Coordinating Commission: University Outcomes-Based Funding Model

Oregon Institute of Technology 82%

$288,589,355

Eastern Oregon University 40%

Outcomes

60% Amount Allocated: $141,468,722

Total State Appropriations

Percentage Difference in Funding from Prior Year Total Base Allocation (Non-SCH) Inflation Adjusted Base Allocation

New Funding Level - Before Stop Loss

Adjusted Student Credit Hour Allocation Total Unadjusted Allocation

Base Funding Allocation SCH & Outcomes Funding Allocation SCH

$
$

New Funding Level - With Stop Loss & Stop Gain New Funding Allocations

Adjusted Outcomes Allocation Student Credit Hour Allocation Percentage Difference in Funding from Prior Year Final Allocation Stop Gain Adjustment

University of Oregon Dollars Allocated (All levels) Dollars Allocated FOR INFORMATIONAL PURPOSES ONLY

4,556 $ 12,518 $ 6,137 $ 0.0% 0.0%

$
$
$
$

1,777 $ 4,999,719 $

$
$
$
$
$
$

Total SCH % of Total Appropriations (included in Base)

30,437 0.5% 1,521,867 $

Dollars Allocated (All levels) Dollars Allocated per occurence (All levels)

760 $ 2,006 $

$
$

1,519 $ 1,777,617 $

$
$

Dollars Allocated (All levels)

0.6%

0.0% 0.0% 0.0%

SSCM MODEL

Student Sub-Populations:

Underrepresented minority students
Low income students (Pell recipients)
Rural students
Veteran students

SLIDE 7

7

SSCM MODEL SUMMARY – FUNCTI ON

 Provides resources for “base” support for Mission, Research and Regional needs  Allocates appropriations across institutions by performing Outcomes-Based calculations that incorporate:

Weighting factors
Degree completion data, including level, type and student information

 Allocates appropriations across institutions by performing Activity-Based calculations that incorporate:

Course instruction cost
Student Credit Hour (SCH) completion, including type and level

 Additional capabilities:

Compares each institution’s allocation to prior year
Stop-Loss – redistributes a portion of the post-OBF allocation to provide each

institution support equal to a set proportion of the prior year allocation

Stop-Gain – redistributes a portion of the post-OBF allocation if an institution

receives allocation greater than a set proportion of the prior year allocation

SLIDE 8

8

 Total PUSF Appropriations – Base = (Outcomes-Based Funding + Activity-Based Funding)  OBF & ABF pools are allocated similarly:

Institutional performance x weighting factors = weighted total
utcomes/activity basis
The entire OBF/ABF pool is allocated among institutions according

to their respective ratio of performance points

 The Stop-Loss and/or Stop-Gain functions can then redistribute a portion of allocations to keep all institutions within a bracketed amount of change  The model uses three-year rolling averages to balance predictability and responsiveness

SSCM MODEL SUMMARY – METHOD

SLIDE 9

9

 Degree information – used for Outcomes-Based calculations

3-year average of degrees awarded to resident students1, organized by institution,

degree level, field of study (CIP)

Sub-population statistics of resident degree recipients, organized by institution and

number of sub-populations each student represents (more on this later)

 SCH information – used for Activity-Based calculation

3-year average of resident SCH completions, organized by institution, degree level,

field of study (CIP)

 FY 15 RAM/Prior year allocation

Allocation for Regional Support, Mission, and Research are determined by FY 15

RAM and carried forward with adjustments for inflation

Stop-Loss calculations based on prior year allocation (RAM for FY 15, SSCM for FY

16 and through transition period)

 Cost-of-instruction data – Used to weight SCH and degree

utcomes data according to their relative costs

SSCM MODEL SUMMARY - DATA

1 Non-Resident PhD students are included in PhD level calculations

SLIDE 10

10

SSCM MODEL SUMMARY

Degree area of study weighting example:

SLIDE 11

11

 Research

Major portion of mission, particularly at the three research

universities

Serves key economic development and innovation needs of the state

 Mission

Provides funding for non-instructional public service mission
Could include base support for certain niche high-cost programs

 Regional Support

Provides resources for higher cost mission of the four TRU

universities which serve a unique and critical public policy purpose

 Dual-Credit

SCH based funding to continue support for dual-credit course
fferings

RATI ONALE - BASE

SLIDE 12

12

Replicated cost-based weighting factor approach to SCH allocation Used as a bridge to transition from current enrollment based funding model to future completion based outcomes model Supports and incentivizes enrollment, and provides intermediate payment Continues to support partnerships between institutions and sectors

RATI ONALE - SCH

SLIDE 13

13

More tightly link state incentives to state’s investment in the 40-40-20 goal Matches “Tight-Loose” investment framework Creates reward for institutional investment in student services and attracting and retaining equity lens students Focuses institutional and state discussion and accountability on student success and completion

RATI ONALE - OBF

SLIDE 14

14

Degrees

Investments in degree outcomes enjoyed overwhelming

support of all TWG participants

Simple, un-“game-able” measure
Strongly incentivizes transfer & articulation, aligning student

pathways

Focuses on high-quality offerings and investing in student

success

All levels (BA, MA, Prof., PhD) are important to Oregon and

the Oregon economy. Cannot meet goals of top-40 without advanced degrees.

RATI ONALE – OUTCOME METRI CS

SLIDE 15

15

 Student sub-populations – key to meeting equity lens goals and meeting demographic challenges

Include:
Underrepresented minority students
Low income students (Pell recipients)
Rural students
Veteran students
Methodology: “Additive with Cap”
Student completion in any one category receives additional

weighting

Increased weighting with increased number of categories up to a

set cap

Targeted sub-populations need additional resources/offer unique

challenges and are more expensive to serve, yet are key to 40-40-20

RATI ONALE – OUTCOME METRI CS

SLIDE 16

16

Oregon Employment Department forecasts for high-wage/high-demand occupations Nearly all STEM, health or business related Create reward for institution to focus on critical areas of the State’s economy Bilingual Education included as key need for K- 12 partners and changing demographic make up

f the state

This section will require periodic evaluation process RATI ONALE – DEGREE TYPE

SLIDE 17

17

RATI ONALE – DEGREE TYPE

SLIDE 18

18

 Quality undergirds and is the foundation for all of the HECC’s attainment goals  The TWG and HECC Staff have worked with IFS, OSA and Provost’s Council representatives on academic quality and recommended a process to develop a robust evaluation process  The HECC with leadership from Commissioner Dyess and Director Noor will work to develop the means for institutions to report their efforts to measure quality including:

Process
Capacity
Accreditation
Externally validated
Long-term employment outcomes

 It is clear that quality is too dynamic and multi-faceted to be boiled down to a single agreed upon numerical measure, but it can be viewed through a more comprehensive structure like the one proposed  HECC Staff will continue engagement with faculty groups around the development and implementation of OBF and around academic quality

QUALI TY

SLIDE 19

19

 HECC provides direction on policy options/staff recommendation  TWG will reconvene to finalize a phase-in approach and perfect technical issues within the model  HECC Staff will continue working with VPFA’s in order to conclude a recommendation regarding base appropriations  An OAR has been issued for public comment which outlines the model structure with adopted no sooner than March 12th, 2015  An OAR will be issued for public comment reflecting the Commissions weighting and policy direction with adoption no sooner than April 9th, 2015  Between now and April, staff will

Continue collaborative effort with university, IFS and OSA leadership
Engage and collaborate with faculty leaders
Conclude policy and model discussions to allow for implementation

NEXT STEPS

SLIDE 20

20

Important to recognize that budgeting is the key measurement of priority Any changes in funding model will impact the relative funding level of institutions Debate and discussion should focus on the policy priorities of the HECC, and how those are imbedded within the model

HECC PRI NCI PLES AND PRI ORI TI ES

SLIDE 21

21

 Base/Outcomes/Activity split – Of the non-base allocation, in the long-term how much of the total funding should be Outcomes-Based?  Factor weights – Relative weights may be assigned to both Outcome and Activity measures. What is the appropriate weighting scheme?

Cost weighting structure embedded within the model
Matching weighting with program duration
Priority of degrees and degree levels
Priority of student sub-populations
Priority of degree types

 Transition Period/Stop-Loss and Stop-Gain Utilization– Should an institution’s future allocation be adjusted based on its previous allocation? What magnitude of allocation change is acceptable and over what time period?

SSCM MODEL SUMMARY – KEY POLI CY AREAS

SLIDE 22

22

 Six scenarios demonstrate tradeoffs inherent in the SSCM:

Baseline – “Plain vanilla” scenario; no specific emphasis.
BA/BS Focus –Emphasis on the production of Bachelor degrees.
Graduate Degree Focus – Emphasis on graduate-level degrees

(Master’s, Professional, PhD, Graduate Certificates).

Program Duration – Relative weight on a degree level that is roughly

equivalent to course requirements to earn a degree at that level.

Student Characteristic Focus – Emphasis on degrees earned by

students representing one or more underserved population (Rural students, Veterans, Low income-Pell recipients, and Underrepresented minority students).

Area of Study Focus – Emphasis on STEM, Health degrees, and

Bilingual Education degrees

HECC F&A DI SCUSSI ON OF POLI CY OPTI ONS

SLIDE 23

23

TENSI ON EXAMPLE

BA/BS Degree Weight BA/BS Degree $ Area of Study $ All Degrees $ All Graduate Degrees $ Student Characteristics $

SLIDE 24

24

TENSI ON EXAMPLE

All Graduate Degree Weights All Graduate Degrees $ Area of Study $ All Degrees $ BA/BS Degrees $ Student Characteristics $

SLIDE 25

25

TENSI ON EXAMPLE

Student Population Characteristics Weight Student Population Characteristics $ All Degrees $ Area of Study $

SLIDE 26

26

2/ 5 F&A AND OBF TWG FEEDBACK

Align program duration and degree allocation weights.

Relative value of degrees within the SSCM should roughly

mirror the relative duration of academic program levels.

Provide sufficient resources for targeted student sub-populations.

Establish allocation levels that, once fully phased in, are of a

magnitude consistent with the additional efforts required by institutions to focus on those students.

SLIDE 27

27

2/ 5 F&A AND OBF TWG FEEDBACK

Area of Study Focus

STEM, Bilingual Education, and Health degrees should be

given special status in the SSCM, reflecting their relatively high importance to the Oregon economy.

Transfer student degrees

The model should have the capability to differentiate and

reward separately degrees earned by students after transferring from a community college than those that start as freshmen at an institution

The OBF TWG will undertake this work as this capacity is

not presently embedded within the model.

SLIDE 28

28

2/ 5 F&A AND OBF TWG FEEDBACK

Phase-in period will allow time and fiscal space for all institutions to adjust to and be position to succeed under the SSCM.

Transition period likely to involve use of Stop-Loss/Stop-

Gain and gradual path to targeted split of non-Base allocation.

Outcomes/Activity Allocation Split

Suggested terminal OBF/SCH splits varied from 30/70 to

80/20.

SLIDE 29

29

OBF/ SCH FUNDI NG LEVEL

SL: must be less than 6.72% 0.0% SG: must be Greater Than 6.73% 10.1% Degree Level Weight Baccalaureate Degrees 2.0 Masters Degrees 1.0 Doctorate Degrees 1.4 Professional Degrees 1.0 Graduate Certificates 0.2 Total Student Populations Resident Bachelor's Only Weight 1 0.8 2 1.0 3 1.1 4 1.2 5 0.0 6 0.0 7 0.0 8 0.0 9 0.0 10 0.0 Total Area of Study (All Degrees) Weight STEM 1.2 Bilingual Education 1.5 Health 1.2 Other1 1.0 Other2 1.0 Total Dual Credit $/SCH 57,641,499 $ Dollars Allocated Average Value (Degree Allocation Only) % of Total Appropriations 48,373,578 $ 3,927 $ 16.8% Stop Loss/Stop Gain

30% OBF / 70% SCH

537,016 $ 3,069 $ 0.2% 551,259 $ 401 $ 0.2% 5,390,189 $ 2,278 $ 1.9% 2,789,457 $ 6,259 $ 1.0% 2,476,568 $ 1,519 $ 0.9% 204,456 $ 1,671 $ 0.1% Dollars Allocated (All levels) Dollars Allocated per

ccurence

(All levels) % of Total Appropriations 7,014,207 $ 1,215 $ 2.4%

$
$

0.0%

$
$

0.0% 8,205 $ 1,823 $ 0.0%

$
$

0.0%

$
$

0.0% Dollars Allocated (All levels) Dollars Allocated per

ccurence

(All levels) % of Total Appropriations

$
$

0.0%

$
$

0.0%

$
$

0.0% 2,499,859 $ 889 $ 0.9% 760 $ 380 $ 0.0%

60% OBF / 40% SCH

115,282,998 $ 39.9%

$
$

0.0%

$
$

0.0% Dollars Allocated (All levels) % of Total Appropriations (included in Base) 888,808 $ 1,003 $ 0.3% 10,780,377 $ 4,556 $ 3.7% 5,578,914 $ 12,518 $ 1.9% Dollars Allocated Average Value (Degree Allocation Only) % of Total Appropriations 96,747,156 $ 7,853 $ 33.5% Dollars Allocated (All levels) Dollars Allocated per

ccurence

(All levels) % of Total Appropriations 14,028,413 $ 2,431 $ 4.9% 1,074,032 $ 6,137 $ 0.4% 1,102,518 $ 803 $ 0.4% 19,406,870 $ 16,409 $ 3,646 $ 0.0%

$
$

0.0% 4,953,135 $ 3,039 $ 1.7% 408,912 $ 3,343 $ 0.1%

$
$

0.0%

$
$

0.0%

$
$

0.0%

$
$

0.0% 1,519 $ 760 $ 0.0% 1,777,617 $ 2,006 $ 0.6% Dollars Allocated (All levels) Dollars Allocated per

ccurence

(All levels) % of Total Appropriations 4,999,719 $ 1,777 $ 1.7% Dollars Allocated (All levels) % of Total Appropriations (included in Base)

$
$

0.0%

$
$

0.0% 14,373,837 $ 6,075 $ 5.0% 7,438,552 $ 16,691 $ 2.6% Dollars Allocated Average Value (Degree Allocation Only) % of Total Appropriations 128,996,208 $ 10,471 $ 44.7% Dollars Allocated (All levels) Dollars Allocated per

ccurence

(All levels) % of Total Appropriations 18,704,551 $ 3,241 $ 6.5% 1,432,043 $ 8,183 $ 0.5% 1,470,025 $ 1,070 $ 0.5% 21,879 $ 4,862 $ 0.0%

$
$

0.0% 6,604,180 $ 4,052 $ 2.3% 545,216 $ 4,457 $ 0.2%

$
$

0.0%

$
$

0.0%

$
$

0.0%

$
$

0.0%

$

0.0% 6,666,291 $ 2,370 $ 2.3% 2,026 $ 1,013 $ 0.0%

$
$

0.0% Dollars Allocated (All levels) Dollars Allocated per

ccurence

(All levels) % of Total Appropriations 9.0%

$
$

0.0% Dollars Allocated (All levels) % of Total Appropriations (included in Base) 3.1% 153,710,663 $ 53.3% 6.7% 6,778,855 $ 2.3% 9,038,473 $ 25,875,827 $

80% OBF / 20% SCH

20.0% 3.4% 1.2% 3,389,427 $ 9,703,435 $ 2,370,156 $ 2,674 $ 0.8%

$

SLIDE 30

30

OBF/ SCH FUNDI NG LEVEL

3 0 % OBF / 7 0 % SCH Degree Level Weighting

SLIDE 31

31

OBF/ SCH FUNDI NG LEVEL

3 0 % OBF / 7 0 % SCH Student Sub-Population Weighting

SLIDE 32

32

OBF/ SCH FUNDI NG LEVEL

3 0 % OBF / 7 0 % SCH Priority Degree Weighting

SLIDE 33

33

OBF/ SCH FUNDI NG LEVEL

8 0 % OBF / 2 0 % SCH Degree Level Weighting

SLIDE 34

34

OBF/ SCH FUNDI NG LEVEL

8 0 % OBF / 2 0 % SCH Student Sub-Population Weighting

SLIDE 35

35

OBF/ SCH FUNDI NG LEVEL

8 0 % OBF / 2 0 % SCH Priority Degree Weighting

SLIDE 36

36

Funding Split and Timeline: Goals:

Provide sufficient resources in all areas to reward institutions
n their efforts to meet students needs and drive completion
Provide a known and reasonable timeframe for institutions to

implement retention and support programs and adjust internal funding mechanisms

OBF/ SCH WEI GHTI NG RECOMMENDATI ON

SLIDE 37

37

OBF WEI GHTI NG RECOMMENDATI ON

Weighting Factor Recommendation: Goals:

Using cost-weighting and duration-

weighting structure

Focus resources on critical, underserved

student populations

Support key industry needs with

priority degree areas

SLIDE 38

38

Continue SCH cost weighting Utilize Degree cost weighting structure Utilize Stop-Loss and Stop-Gain

Stop-Loss begins at DAS inflation for 2015-16 and widening
ver time
Stop-Gain begins at 1.5x increase in the PUSF and widening
ver time

Model to be implemented by fiscal year 2020

OBF WEI GHTI NG RECOMMENDATI ON

SLIDE 39

39

SCENARI O ANALYSI S

SLIDE 40

40

SCENARI O ANALYSI S

SLIDE 41

41

SCENARI O ANALYSI S

SLIDE 42

42

SCENARI O ANALYSI S

SLIDE 43

43

 Base/Outcomes/Activity split – Of the non-base allocation, in the long-term how much of the total funding should be Outcomes-Based?  Factor weights – Relative weights may be assigned to both Outcome and Activity measures. What is the appropriate weighting scheme?

Cost weighting structure embedded within the model
Matching weighting with program duration
Priority of degrees and degree levels
Priority of student sub-populations
Priority of degree types

 Transition Period/Stop-Loss and Stop-Gain Utilization– Should an institution’s future allocation be adjusted based on its previous allocation? What magnitude of allocation change is acceptable and over what time period?

SSCM MODEL SUMMARY – KEY POLI CY AREAS

SLIDE 44

44