“Revolutionary” new funding to shake up Ontario’s colleges and universities

Posted on April 13, 2019 in Education Policy Context

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OttawaCitizen.com – News/Local
April 12, 2019.   JACQUIE MILLER

Ontario’s plan to tie funding for colleges and universities to their performance is a shakeup that could be revolutionary, one education expert says.

The province’s plan to become a national leader in “outcomes-based funding” is a good idea in principle, Alex Usher, president of the consulting firm Higher Education Strategy Associates, said Friday.

“But the devil is in the details.”

The province will tie 60 per cent of post-secondary funding to performance by the 2024–25 academic year, according to the budget released Thursday.

The province’s 45 colleges and universities have been funded primarily based on how many students are enrolled. Only a bit more than one per cent of funding is tied to performance.

The province says it will use 10 metrics to measure performance, but institutions will have flexibility to weigh them based on their own strategic goals.

Usher said the metrics could include, for example, graduation rates, whether graduates found jobs and, if so, how much money they would make, or how many research grants were awarded to institutions.

The organization representing faculty associations in Ontario opposes the idea, saying it will put small and northern institutions at a disadvantage.

“In reality, performance-based university funding will create a system of winners and losers, putting educational quality at risk for everyone,” a statement from the Ontario Confederation of University Faculty Associations said.

The explanation provided in the budget said institutions would be “measured against their own targets based on historical performance.”

Usher said he gave the provincial government credit for understanding the basics of good metrics. It’s not fair to hold all institutions to an identical standard, said Usher, who wrote a blog post about the proposal called “The Bombshell in the Ontario Budget.”

For example, a “good” graduation rate at the University of Toronto might be different than at Algoma University in Sault Ste. Marie, Usher said in an interview.

However, whether performance-based funding improves education depends on how well the government designs the metrics, he added, and he warned the change might also be “a massive cut in disguise.”

“If up to 60 per cent of your funding is at risk and you lose some funding, what happens to that money? is it there for other institutions to have a shot at? … Or is (the government) expecting some of that money to come back via savings because they don’t think institutions are going to hit the targets?

“Who knows? Unless they get that part right, it’s really hard to comment.”

A spokesman for Algonquin College said tracking performance outcomes was already key to the way the college operated. Algonquin reports on numerous metrics for each goal in its strategic plan, communications officer Chris Lackner said in a statement.

“We look forward to working with our government partners on their new funding model and await more details on which metrics will be used to rate college performance in Ontario.”

The president of the faculty union at Algonquin, Pat Kennedy, said it was strange that the government had not released information about performance metrics. “Everyone is just trying to understand how this might work. I would have expected them to have a much clearer explanation and direction.”

Carleton University President Benoît-Antoine Bacon issued a statement saying the university was “committed to working with the government on the (new metrics) in a spirit of transparency, dialogue and accountability.”

A spokesman for the University of Ottawa said that institution was still studying the budget.

Performance funding is popular in the United States, where about 29 states used it last year, according to a report called Lessons Learned: A Case Study of Performance Funding in Higher Education by the Third Way think tank.

The primary motivation was to increase graduation rates, the report said. “Colleges would readily accept state funding based on ‘seats in the classroom,’ but faced no consequences if students failed or withdrew from the class or dropped out completely.”

However, while research is mixed, performance funding generally has not improved graduation rates, the report said.

“Overwhelmingly, the empirical research on performance funding suggests that, in most current iterations at the state level, the policy fails to improve degree completions and graduation rates.”

Some states also award extra funding as incentives for institutions to award degrees in “high need” areas such as science, technology, engineering and math or to reward institutions that serve under-represented groups, such as people of colour, those with low incomes and students whose parents don’t have a post-secondary education.

Depending on how the incentives are designed, performance funding can also have unintended consequences.

There is evidence that some U.S. colleges with performance funding tied to graduation rates enrolled more students in short-term certificate programs, while others raised entrance requirements or targeted recruitment in wealthier areas where students were academically more prepared, the report found.


"Revolutionary" new funding to shake up Ontario's colleges and universities

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