New funding for workforce education and training is likely to come with strings. That’s because it’s easier for state legislatures or the feds to attach performance metrics to new money than to existing student aid programs or direct operational funding.
For example, the proposal to open up federal Pell Grants to programs shorter than 15 weeks would mandate that eligible training programs meet local workforce needs and be subject to reporting requirements for the defunct gainful-employment rule
Yet most of the performance funding action in postsecondary education is happening in the states. Last year, 32 states tied some portion of their support for public institutions to graduation rates, equity metrics, or other student outcomes measures, according to InformEd States, a policy analysis group that this week published a broad look
at state funding formulas in public higher education.
A growing number of states are linking support for colleges to labor market results, such as graduate earnings or credential completion in high-demand fields.
For example, 20 states used workforce-related performance funding metrics in the two-year sector last year, InformEd States found in another recent report
, up from three states in 2012. Those workforce provisions generally did little to improve the earnings of students, the analysis found.
Florida recently upped the ante, as it often does.
“No state will place as much of a priority on workforce outcomes as Florida will do, and only a few states directly tie funding to the earnings of former students,” says Robert Kelchen
, professor and department head at the University of Tennessee at Knoxville’s Department of Educational Leadership and Policy Studies, and a contributor to research from InformEd States.
What’s at stake:
Ron DeSantis, the state’s Republican governor, in June signed a law featuring
a money-back guarantee that requires public colleges and universities to refund tuition fees for students who are not able to find a job within six months of completing certain programs—including short-term certificates and associate of science degrees.
The policy also created new workforce grants for colleges, which will cover up to two-thirds of the cost of short-term, high-demand programs. And it features performance funding for workforce-oriented training. One-third of the funding under this formula is based on student job placement. The rest is tied to student earnings, with an emphasis on increasing the economic mobility of underserved populations.
“It is really encouraging the colleges to work closer with our career service and workforce teams as well as our business and industry partners,” Tonjua Williams
, president of St. Petersburg College, a large, primarily two-year institution, told me during a recent interview for a JFF podcast
. “We cannot afford to have a dead-weight program and a student not get a job.”
Looking to Texas:
Both Kelchen and Martha Snyder
, a senior director at HCM Strategists, say the closest proxy to the Florida law is the performance funding model for the Texas State Technical College system.
Since 2013, the system has received a large portion of its state funding based on an estimate of the economic benefit it creates through increased tax revenue. (Specifically, it takes the five-year average salary of former students, subtracts the minimum wage, and calculates the value-added tax revenue from the difference, according to a 2016 analysis
from the Lumina Foundation.)
“We don’t get paid unless you do,” the 10-campus Texas system says on its website.
The funding formula has worked well for both students and the two-year system, Snyder says. Job placements and wages have gone up for graduates. And the system has received increased funding while it has improved in several ways, she says, including better coordination in its student recruitment, program selection, and job placement processes.
“It’s also spurred the system to be much more discerning in program offerings,” she says, by helping it decide where to grow or reduce enrollments based on economic and workforce realities.
Outlook for Florida: Snyder praised the new Florida law for its focus on the economic mobility of underserved student populations.
“The tiered weighting system for earnings plus the premium for underserved populations can serve as a strong incentive,” she says. “But the weights need to be sufficient enough to garner attention and change behavior.”
Likewise, defining which students are underserved requires nuance. Snyder says Florida should look beyond income levels with a formula that recognizes disparities across racial and ethnic lines, particularly in economic mobility and intergenerational wealth gaps. The state also should look at disaggregated data within the rural student category, she says.
Kelchen says Florida could buck the trend when it comes to the typically limited impact of workforce outcomes in performance funding.
“Since so much more money is at stake here, the results could be different,” says Kelchen, “It is worth watching to see if the legislature will allow large changes in funding across colleges, or if legislators will try to step in to protect their local college if they are set to lose money.”
Either way, community colleges in Florida are working to make sure their programs are preparing students for the job market.
“It’s beyond the degree. It’s beyond the certificate. It’s in the job or transfer to the university,” says Williams at St. Pete College. “The responsibility of the college has expanded beyond completion.”