2 colleges face funding cuts under formula

For the first time since a new performance-based funding formula went into effect last year, two Arkansas universities fell below the minimum score and now face a reduction in state money this year.

The University of Central Arkansas in Conway and Southern Arkansas University Tech in Camden scored less than the six points required - out of 10 - on the assessment model and will lose up to 5 percent of state funds.

Arkansas Department of Higher Education Director Shane Broadway told the state’s Higher Education Coordinating Board on Friday that both campuses had special circumstances that led to the low scores.

Broadway plans to present to the board at its July meeting an alternative proposal to avoid cutting the 5 percent payment to the two schools.

The state Legislature passed a law in 2011 requiring the Higher Education Department to work with college and university presidents and chancellors to design and implement a new funding model.

Before 2011, the funding formula had been based on the number of student semester credit hours. The new model determines a part of each campus’s state funding by weighing factors such as graduation rates, retention and enrollment in high-demand fields.

Eventually, up to 25 percent of an institution’s state funding could be reduced or eliminated based on its annual scoring on the outcome-based formula.

Broadway told the board Friday that the funding model discourages colleges from participating in improvement programs encouraged by the state.

“Some of our own initiatives harmed these two institutions,” Broadway said.

UCA earned a score of 5.78 points because its administration conducted a degree audit in 2011 - in response to the Higher Education Department’s “Credit When It’s Due” initiative to boost college completion efforts - that resulted in a hefty rise in the number of associates degrees that were awarded.

The audit showed that since 1995, an additional 1,862 UCA students had picked up enough credit hours to earn the degree, significantly higher than the average 20-25 associates degrees awarded each year. The additional degrees were awarded in 2011, and the difference the next year counted as a loss under the performance-funding model when the school years were compared.

“Sometimes people that have completed that many hours already will be motivated to come back to earn a higher degree if you give them credit for what they have already accomplished,” UCA President Tom Courtway said.

Courtway - who has been at the college’s helm since December 2011 - said the funding-assessment score was skewered by a one-year rise, but “it doesn’t mean at all that we’re not meeting performance standards.”

Broadway said UCA would be well above the minimum six-point requirement if the uptick in associates degrees was taken out of the equation.

Courtway said he was hopeful that the issue would be resolved at the Higher Education Coordinating Board’s July meeting.

“When you sit in my chair, you’re concerned about everything from what you serve in the cafeteria to how many students you’ll have in the fall,” he said. “But I trust the intellect and work ethic of Director Broadway, his staff and the board.Whatever happens, we’ll be OK. We’ll work through it.”

Southern Arkansas University Tech earned 5.58 points on its performance-based assessment. The reason, Broadway said, was because of the two-year technical school’s participation in the Path to Accelerated Completion and Employment grant.

Funded by the U.S. Labor Department, the grant allows institutions such as SAU Tech to accelerate certification and degree programs by restructuring the college curriculum and course-completion timing to meet the needs of specific industries.

Broadway said that students in the program can begin a course in the middle of a traditional term and not complete it until the next semester.

For college-reporting purposes, those courses are listed as “incomplete” on student transcripts - which translated into a reduction of points on the performance-based assessment.

“If you back that out, their score would be above six points,” Broadway said.

SAU Tech Chancellor Corbet Lamkin did not immediately return messages left Friday seeking comment.

Broadway said it is imperative for solutions to be found that will not inhibit colleges from participating in improvement measures for fear of reducing scores on the funding-assessment model.

“These are initiatives that we are encouraging institutions to participate in, but it is impacting their numbers because of the way the formula is structured,” Broadway said. “We need to look at it more in depth.”

At its July 25 meeting, the Higher Education Coordinating Board will review the scores of all the state’s higher education institutions and determine how much money will be awarded to each campus.

The objective of the performance-based assessment model is to encourage institutions to make choices that contribute to Gov. Mike Beebe’s goal of doubling the state’s number of degree holders by 2025.

U.S. census data from 2010 show Arkansas had the second-lowest number of degree-holding adults, with only 18.9 percent of residents older than age 25 holding bachelor’s degrees. The national average is 27.5 percent. Only West Virginia had fewer, with 17.1 percent.