Tennessee implemented Outcomes-Based Funding several years ago. I applauded the change from funding allocations that were tied heavily to enrollment growth. When I worked at Chattanooga State Community College in the 90s, the only date we cared about was the 14th day of the fall semester - census day. The new formula rewards degree completion. While it is not a perfect system, it is conceptually an improvement.
Now we have indications that the outcomes focus is paying off. The Lumina Foundation has released preliminary results of their study of the Tennessee program. It shows:
Bachelor’s degrees awarded have increased by 3.4 percent annually since initial formula implementation, compared to 2.5 % annual growth prior to formula implementation. Other states have also had faster growth in bachelor’s degree completion in recent years, consistent with underlying demographic trends, so it is too early to confidently attribute the results to the formula alone.
Associate degrees have increased by 6.3 % annually since initial formula implementation, significantly faster than the 2.8 % average growth rate prior to implementation.
Certificates in Tennessee show strong growth since formula implementation that appears clearly linked to the new funding policy, with 174 % total growth in short-term and 27 % average growth in long-term certificate awards. The “certificate” category is much more flexible than degrees, so institutions have greater scope to create programs very quickly or to define completion of certain existing groups of courses as a certificate award. Tennessee has refined its standards for which certificates can be counted to limit opportunities for “gaming” the formula and to make sure that certificates have genuine academic and economic value for students.