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The Job: Performance Funding

The Job
This week’s issue looks at labor market results in performance funding, including an aggressive new Florida law. Also, the faculty role in career development, big credential pledges from IBM and Google, and Americans’ take on alternative credentials. (Sign up here to get this newsletter.)

Photo by Stephen Dawson on Unsplash
Photo by Stephen Dawson on Unsplash
Or Your Money Back
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.
The Kicker:
“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.”
The Faculty Role
An English class at University of Redlands. (Courtesy of U. of Redlands)
An English class at University of Redlands. (Courtesy of U. of Redlands)
Some four-year universities are offering stipends and training to faculty members to encourage them to incorporate career counseling and professional development into their classrooms, John Newsom, a veteran higher education reporter based in North Carolina, reports for Work Shift.
For example, the University of Redlands, a private liberal arts institution in California, offers grants of $1,000 each year to a group of five Career Faculty Fellows. The instructors must include career readiness concepts in their curricula.
The total dollar amounts spent on grants at Redlands and a handful of other universities are tiny. But they appear to be helping, according to Newsom’s report.
This made me wonder, have philanthropies that focus on economic mobility and higher education considered investing more in these programs? The same question applies to universities that face the possibility of having some of their state funding tied to the labor market returns of graduates.
The University of Central Florida is sold, with about 100 professors embedding career development in their courses. As Lynn Hansen, the university’s executive director of career services, told Newsom,
“The employment-after-graduation piece is pretty important to the people of Florida. We want to make sure as a university we’re taking that seriously, too.”
Corporate Credentials
In a meeting last week at the White House, executives from Google, IBM, and Microsoft pledged to expand cybersecurity and digital skills training programs.
In addition to spending $10 billion over five years to strengthen cybersecurity, Google said in a blog post that it would train 100,000 Americans through its Google Career Certificate program. The certificates in IT support and data analytics include a focus on in-demand skills such as data privacy and security, the company said.
The White House said IBM will train 150,000 people in cybersecurity skills over the next three years. IBM also will partner with more than 20 HBCUs to establish cybersecurity leadership centers that will seek to develop a more diverse cyber workforce.
Microsoft will expand partnerships with community colleges on cybersecurity training, the White House said.
Details remain thin about those pledges. IBM did not respond to a request for more information. And the most recent report from Google about its IT support certificate—likely the most high-profile alternative credential to date—features numbers from 2019. More than 250,000 people have enrolled in that certificate program, according to the report from Grow with Google, the company’s philanthropic training arm.
What people think: More than half of Americans (51 percent) say they would recommend that someone they know skip attending a highly prestigious college to pursue the sort of credential Google is seeking to offer (one from a reputable tech company that provides a high likelihood of employment).
That was one of the newly released findings from a nationally representative YouGov poll of U.S. adults conducted in August for the Charles Koch Foundation.
Among the 1,000 respondents, 30 percent said credentials offered by companies will compete directly with four-year colleges fairly soon. And 22 percent said that shift will happen, but not for a long time.
The survey found that 63 percent of respondents would recommend an employer-sponsored college program, like the tuition benefits offered by Walmart and Target through Guild, rather than going straight from high school to enroll in a traditional, full-time four-year college. Community college graduates were the most likely to approve of this option.
Americans aren’t getting much help with their education plans after graduating from high school, according to the survey:
  • 44 percent of respondents did not seek advice on educational options after high school, while 29 percent listened most to a parent or close family member. About 10 percent said they listened most closely to advice from a high school guidance counselor or teacher.
  • White respondents were most likely to listen to a family member (33 percent), compared to Black (18 percent) and Latino (20 percent) respondents. Black respondents were most likely to listen primarily to a high school guidance counselor (17 percent).
More from Work Shift
Opinion: The nation can’t just train its way to the ‘future of care.’ We need a big rethink.
 
Open Tabs
Community Colleges
Student transfer rates declined substantially during the last academic year (down 191,500 students overall) with the exception of students who transferred to a four-year institution from a community college (down 1.3 percent), according to a new report from the National Student Clearinghouse Research Center. Upward transfer rates to four-year colleges were down more steeply, however, among men and Black students.
Public support for free college proposals has slid during the last two years, according to the results of a national survey by Education Next. The May survey found that 60 percent of U.S. adults supported free community college, down from 69 percent in 2019. Support for free four-year college was 43 percent, compared to 60 percent two years ago.
Fast Track Credentials
The University of Alaska Anchorage is tapping city funds to offer tuition-free occupational certificates to local residents whose employment has been disrupted by the pandemic. The new Fast Track grants will cover up to $9,000 a year in tuition and fees—with another $9,000 for living expenses—for certificates in bookkeeping, IT support, and other fields.
Veteran Students
A majority of respondents to a survey of veterans of the U.S. military who attended for-profit institutions said their college education prepared them well for employment (78 percent) and was worth the price (80 percent). The survey was commissioned by Career Education Colleges and Universities, the for-profit sector’s trade group.
Continuing Education
The University Professional and Continuing Education Association (UPCEA) has created a new hub and council to track alternative credentials. The Council for Credential Innovation will tap the expertise of senior university leaders who work on the nondegree strategy of their institutions. And the Alternative Credentials Network will focus on sharing best practices and emerging trends in the space.
An event next week will tackle the question of what skills working learners will need in the post-pandemic workforce. Hosted by Schmidt Futures, the discussion will feature experts weighing in on how to improve continuing education for both employers and workers, and what role learning technology can play in helping adult students gain needed skills.
Skills Training
“We have dueling problems—workers unable to find good-paying jobs that fit their skills and employers struggling to hire skilled workers for in-demand and emerging roles,“ wrote a group of 118 businesses in a letter to the U.S. Congress. The group called for tax incentives for training programs and for the embrace of flexible short-term and online programs.
“To help minority students in business and tech develop the kinds of soft skills that can help set humanities grads apart, universities should create comprehensive job search preparation programs designed specifically for minority students in high-disparity disciplines,” Elizabeth Austin wrote in the Washington Monthly. The article cites data showing wage parity for graduates of the humanities 15 years out of college across racial, ethnic, and gender lines.
Which performance funding formulas are you watching? Any good ones percolating out there? Thanks for reading. —PF @paulfain
 
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