Policy

Florida Performance Funding Metric Looks at Student 'Sticker Price'

• By Dian Schaffhauser
• 04/20/17

Universities and colleges in Florida will shortly be evaluated by a new student-focused metric newly introduced into their annual state evaluations. In 2014 the State University System of Florida introduced a 10-metric performance funding model that initially included an indicator, "cost to the institution." The Board of Governors recently morphed that metric into "the cost to the student." The state system has 12 universities and about 352,000 students.

Institutions that don't meet a required threshold in that evaluation or that end up in the lowest three rungs of the evaluation ranking won't participate in state investment. The recent change hits several schools, which could change their eligibility for the performance-based funding.

Performance funding was initially introduced in the state in 2014 and put into law last year by Governor Rick Scott. The goal was to motivate schools to focus on work that would increase graduation. Proponents of the model point to resulting increases in student graduation and retention, as well as boosts in STEM-related degrees in both undergraduate and graduate programs.

At the time the law was passed, the state kicked in $225 million, and the universities themselves committed $275 million from existing funds.

Each metric generates a given number of points for the school. Metrics cover such measures as six-year graduation rate, bachelor's degrees awarded in areas of "strategic emphasis" and median wages of bachelor's graduates employed full-time. A university must earn more than 50 points to receive the money. But those institutions with the bottom three scores lose access to the funding for the year; those with the top three scores receive additional funding.

Previously, to calculate the average cost per bachelor's degree, the metric formula took the previous four years of expenditure data divided by the number of credit hours for that year to create a cost per credit hour for each year. That cost was multiplied by 30 (the number of credit hours in an academic year) to calculate an annual cost. The four average annual costs were summed to derive an average cost for a bachelor's degree requiring 120 credit hours.

The problem with that approach, according to the board, was that as long as the appropriations to the universities increased, the metric would never see an improvement; also, the board assumed that "the allocation of faculty effort could significantly impact expenditures."

Under the new rule, the metric would look at "sticker price," or a student's tuition and fee cost for a 120-hour bachelor's degree after financial aid has been considered. Universities could influence this "net cost" from four directions: the cost of fees (tuition is set by the state); the cost of textbooks or digital resources used in class; the amount of university financial aid provided to the student; and making sure students take only those courses that will enable them to earn a degree in 120 hours.

Scoring scales from one point to 10 by looking at two aspects: the average cost of the degree and how much improvement the institution has made from one year to the next. For example, in the 2015-2016 academic year, Florida A&M University had an average cost of $40,080 for a bachelor's degree under the old metric. Under the new measure, it would come in with the third-lowest student cost at $12,640. However, Florida International University, which initially had the second-lowest cost for a degree, at $25,990, would now have the third highest student cost at $17,180. The average net cost across the board was less than $15,000.

The board expects to vote on the new rankings during an upcoming meeting in June.