Higher Education Productivity in America

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1 DECEMBER 2010 EDITION 2 Higher Education Productivity in America Experts say that for a stronger nation, at least 60 percent of Americans should have high-quality postsecondary degrees or credentials. Over the past four decades, only about 40 percent of Americans have held at least a two-year degree. Working with our partners at the state level, Lumina Foundation for Education is changing that through its Four Steps to Finishing First public policy agenda.

2 Building Will for Higher Education Productivity Through Knowledge and Understanding The current way of doing business is simply not getting the job done and cannot meet the nation s workforce needs. America s colleges and universities have to be more efficient and effective, but they can t do it alone. National and state leaders understand this and are joining forces with elected officials, policymakers, community leaders, parents and students to call for changes in America s postsecondary system that reflect Lumina s Four Steps to Finishing First productivity agenda. Louisiana s 32 Percent Solution Facing a dramatic loss of state taxpayer support, Louisiana is studying Lumina s Four Steps to Finishing First in Higher Education productivity agenda as a road map for making cuts while maintaining an efficient, high-quality education system. System leaders have been asked to eliminate 32 percent of their state support from the 2012 budget. With support from Productivity Strategy Lab funds, Louisiana Community and Technical College System President Joe May and institutional leaders are Secretary Duncan Concurs with the New Normal I am here to talk today about what has been called the New Normal. For the next several years, preschool, K-12, and postsecondary educators are likely to face the challenge of doing more with less. My message is that this challenge can, and should be, embraced as an opportunity to make dramatic improvements. I believe enormous opportunities for improving the productivity of our education system lie ahead if we are smart, innovative, and courageous in rethinking the status quo. U.S. Secretary of Education Arne Duncan in November 17, 2010 in a speech to the American Enterprise Institute responding with a sweeping plan to rethink services and instructional delivery so the system can still meet plans to enroll 100,000 more students by 2015 enrollment one-third higher than projected for The draft plan does not close campuses, limit student access or remove educational services from any community moves that would limit opportunity for Louisiana residents at a time of high unemployment. Rather, May and his colleagues are exploring a strategic restructuring of the system s operating budget. Key provisions of the draft plan aim to: The Four Steps to Finishing First (The Productivity Policy Agenda for States) Lumina s state policy agenda for increasing the number of graduates with existing resources and without sacrificing quality: 1. Reward institutions that focus on students completing quality programs, not just attempting them 2. Reward students for completing courses and degree or certificate programs 3. Expand and strengthen lower-cost, non traditional education options 4. Invest in institutions that demonstrate the results of adopting good business practices reduce administrative costs consolidate academic and operational services eliminate high-cost, low-performing programs or seek private-sector support for their operation align tuition with market demand restructure tuition and fees to streamline course taking and encourage completion increase the use of technology in delivering instruction.

3 Leading Through Action: States Demonstrate Commitment and Conviction, Advance Productivity In this quarterly report, HCM Strategists highlights Steps 2 and 3 of the Four Steps to Finishing First agenda, where we see growing state commitment and conviction.. Spotlight on a Productivity Grantee In January 2010, Tennessee passed the Complete College Tennessee Act (CCTA). CCTA addresses the need for more Tennesseans to be better educated and trained, while also acknowledging the state s diminished fiscal capacity to support higher education. The Tennessee Higher Education Commission recently approved three changes to implement the CCTA reform legislation: the statewide strategic plan; the new outcomes-based funding formula. 100% of state appropriations will be based on outcomes such as degree production. Each of these outcomes is uniquely weighted at each institution to reinforce mission and reflect the priority given to each outcome; and the new Performance Funding program. The Performance Funding program provides a quality assurance mechanism that focuses on student learning and program quality. Tennessee has a $1.2 million multi-year grant from Lumina Foundation to support its productivity agenda. No funds are allowed for lobbying. Step 2. Reward Students Research increasingly supports the idea that financial incentives can help promote completion, particularly for low-income students. A recent experiment in Ohio found that low-income students who received incentives to enroll full-time in community college earned substantially more credits than those who did not. An experimental program to provide extra financial aid to low-income students in Wisconsin is also showing promising early results. The Iowa Board of Regents held a workshop October 27th to discuss alternative approaches to tuitionsetting at the state s three four-year universities. Iowa faced steep budget shortfalls later than many other states and is now questioning whether its usual approach to setting tuition is still in the state s best interest. HCM Strategists consultant Nate Johnson, who leads Lumina s Productivity Strategy Lab on student incentives for completion (Step 2), gave a presentation at the Regents meeting. Johnson placed Iowa s budget and tuition situation in a national context and outlined ways other states are using fiscal challenges as an opportunity to make tuition and financial-aid policy more strategic. Tennessee is considering changes to its lottery-funded merit scholarship program, including a reduction in the maximum number of credit hours that can be funded. Such scholarship caps create incentives for students to finish in a limited time. Students who exceed the cap would not face penalties; they would simply pay the same tuition as everyone else. Florida recently imposed tighter caps on its merit scholarships; it now requires students to pay back scholarships when they withdraw from too many courses. The policy has dramatically reduced course withdrawals at four-year universities. Other states are experimenting with more direct incentives. Indiana Governor Mitch Daniels recently proposed paying students who graduate early effectively letting them share in what the state saves. Texas has an on-time graduation program that provides a $1,000 bonus to students who complete bachelor degrees within three credits of the program requirements.

4 Step 3. Lower-Cost Options To assure that community colleges are effective lower-cost entry points for students pursuing bachelor s degrees, transfer must be clear and systematic. In the past couple months, an increasing number of states passed legislation that improved this process. Arizona Governor Jan Brewer signed a bill that requires a common course-numbering system across all two- and four-year institutions for 100- and 200-level courses. This will ensure all lower division classes transfer across the system. The Board of Regents will reveal its plan to implement the legislation at its December meeting. California passed a law that guarantees California State University admission to community college students who earn a) one of the new 60-unit transfer degrees in a defined major, and b) graduate with at least a 2.0 grade-point average. The students will be enrolled as juniors in a major similar to their community college major. Louisiana is in the first semester of implementing its new guaranteed transfer associate s degree. Delgado Community College in New Orleans and HCM Strategists will host a site visit on January 12, 2011 to discuss the legislation that created this degree and the steps that led to successful implementation. Western Governors University (WGU) and Indiana have partnered to create a virtual state university whose students are eligible for state aid. Working to address the state s workforce needs, WGU Indiana receives no ongoing state support. A Strategy Lab site visit at the WGU headquarters in Salt Lake City, Utah will occur Thursday June 9, 2011 from 1-4pm. Lumina releases Navigating the New Normal At its 2010 National Productivity Conference, Lumina released a paper, Navigating the New Normal, which examines state strategies for increasing attainment in this tough budget climate. The paper s recommendations draw from new, statespecific models estimating how much degree production is needed, how much it will cost and how to improve student flows and restructure costs. The paper and interactive models for all 50 states are available at 10% = 25% less credits savings 10 percent reduction in the number of excess credits accumulated by students on their way to a degree would net savings equivalent to nearly 25 percent of the additional investment needed to reach the Big Goal. Lower-cost options growing in Ohio A study by the Ohio Board of Regents found that the number of transfer students and online enrollments significantly increased last year, with a 21 percent growth in transfers between state schools and a 25 percent increase in distance learning - students attending classes online or outside the traditional classroom. More than half of new students enrolled last year in Ohio attend community colleges and branch campuses. By transferring credits from these less expensive institutions to fouryear universities, Ohio students and their families saved $20 million last year.

5 Productivity Strategy Lab States Lumina Foundation launched four Strategy Labs one for each of the Four Steps at its November National Productivity Conference. Strategy Labs provide real-time, peer-based technical assistance. Key activities include site visits, in-state meetings, flexible travel funds and collaborative meetings with state policymaker organizations. Initial support focuses on 18 states. The Maryland Course Redesign Initiative Maryland is scaling statewide course redesign. Efforts focused on improving learning and reducing costs for large enrollment courses. Results to date demonstrate that this curriculum transformation is yielding an active learning approach that enables schools within the system to better meet the needs of students, reduce the cost structure, maintain and enhance quality and use faculty resources more efficiently. Arizona California Colorado Kentucky Indiana Iowa Louisiana Maryland Minnesota Mississippi Montana Ohio Pennsylvania Tennessee Texas Washington West Virginia Wisconsin Frostburg State University (FSU), for example, transformed an introductory psychology course by incorporating online assessment modules and undergraduate learning assistance. As a result, more students performed well in the redesigned course than in the traditional sections, and FSU reduced its cost-per-student 71 percent, from $89 to $26. Towson University redesigned its Developmental Math 101 course based on the principles of increased student engagement, more time on task, additional technology-assisted instruction and restructuring of faculty time. More than 50 percent of the students in the redesigned math course passed, compared with less than 33 percent in the traditionally designed sections. 71% reduced cost per student of a redesigned intro psych course Coppin State University redesigned two critical developmental mathematics courses by developing a common syllabus, training undergraduate tutors to provide individual assistance, and using computers for class work, homework and tests. In the redesigned courses, the Drop/Withdraw/Fail rate dropped to less than 32 percent eight percentage points lower than the rate in the traditionally delivered course. Because many students entering Coppin need to take developmental math, the redesigned course could significantly influence student retention rates. Tracking Momentum is a quarterly newsletter produced by HCM Strategists with support from Lumina Foundation. HCM is a public policy and advocacy consulting group focused on finding effective solutions in education and health. Tracking Momentum provides updates on how states and colleges are advancing Lumina's Four Steps to Finishing First productivity agenda. For more information, see The views expressed in this publication are those of the authors and do not necessarily represent those of Lumina Foundation, its officers and directors or employees. Align. Advocate. Advance.

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