Federal-state funding partnerships for colleges and universities make higher education more affordable and equitable. Colleges and universities that receive public funding should be accountable for using the money effectively and meeting certain benchmarks, such as improving student outcomes by increasing retention, transfer, and completion. There are many advocates for federal-state partnerships that improve student outcomes or make college free. However, any accountability system should give institutions flexibility to set reasonable goals.
A new report from the Center of American Progress considers performance contracts as a way to make federal and state governments, accreditors, and institutions accountable to certain expectations and goals. Colorado policymakers created the concept in 2004 when revamping state financing of higher education through the Colorado Opportunity Fund, essentially a voucher system.
In order to participate in the fund, institutions had to agree to a performance contract negotiated with the Colorado Department of Higher Education. Required goals and metrics included increasing retention and graduation rates, using a general education curriculum, and boosting programs that served state needs for teachers and nurses while holding institutions accountable to the state.
In retrospect, these contracts could have been more effective. Some of the weaknesses in the contracts included:
- There was no incentive for institutions to meet their goals
- The Colorado Department of Higher Education provided little oversight
- There were too many individual goals for the department to monitor
- Contract goals were not connected to a strategic plan
- Unequal resources among institutions led to unequal outcomes
The Center’s report acknowledges the weakness in the Colorado performance contracts and outlines lessons for improvement, such as:
- Performance contracts should contain incentives for institutions to make improvements.
- Ongoing monitoring by the government is necessary for improving institutional performance.
- Data reporting should be streamlined.
- Politics between agencies and institutions need to be managed.
- Performance goals should be meaningful and equitable among institutions.
- Private and public colleges should be included in federal-state partnerships.
- Political turnover can impact the long-term success of the program.
Expanding from state to national consideration
A former Colorado state agency official recommended, “Do not let the institutions pick their own metrics…Some are going to lowball it, some are going to go crazy high.” In Colorado, the Department of Higher Education was the best organization to negotiate the contracts and collect data on progress. Even though they lacked the capacity to closely monitor the institutions, it is likely that the state agencies of higher education instead of the U.S. Department of Education are the best entities to create, monitor, and enforce performance contracts.
Federal-state partnerships are likely to be more complex than state agencies and individual institutions. Some additional questions to consider as national funding partnerships are developed in the future, include:
- Are performance contracts necessary in federal-state partnerships? If not, where would the accountability reside?
- Who holds the authority in the contracts?
- Who has capacity to monitor institutional performance?
- What role, if any, should accreditors play?
The Center of American Progress report concludes that implementing performance contracts at a national level would be complicated. But if colleges and universities are going to receive federal and state money, they should be held to higher expectations and accountable for improved student outcomes.