Randy Shumway: Utah's college funding formula impedes needed improvement

Published: Tuesday, Aug. 2 2011 12:00 a.m. MDT

Utah's funding formula for higher education — allocating an equal amount per student and per credit regardless of the course and quality of program — impedes the improvement of Utah's colleges.

This funding formula tacitly incentivizes colleges to under-invest in more costly but highly beneficial curriculums such as engineering, science and business while concurrently maintaining and even growing lower-cost programs that have been repeatedly shown to under-prepare graduates to succeed in today's economy.

Furthermore, Utah's funding approach disincentivizes colleges from helping students maximize learning in the most efficient way. And institutions are financially motivated to expand enrollment regardless of fit between the student and what the college is most qualified to offer.

Today, for the most part, colleges teach students in the same format as they have for many decades, despite a global knowledge economy that demands skills that have evolved beyond those needed just a few years ago.

The result is that tuition has increased while the value of higher education to graduates has simultaneously decreased.

Instead of funding enrollment, Utah should fund higher education based on what valuable skills and knowledge students have demonstrably acquired. This funding model must be structured to motivate efficiency and lasting innovation in higher education while creating a system of accountability for all involved. It must also encourage relevance and rigor in curriculum and focus faculty efforts on helping students critically think about how to apply the skills and knowledge they are obtaining. And it should encourage students to attend the right college for their career goals.

To achieve this, the state should implement a funding approach founded on a societal and economic impact model that objectively quantifies the perpetual value for Utah of varying skills and degrees. For example, combining forecasted employment data with a survey of employers and graduate schools may reveal that a mechanical engineering degree which equips a student with the ability to apply physics and material science to analyze, design and manufacture mechanical systems is worth $30,000 of subsidized tuition to the state of Utah. Similarly, by incorporating and quantifying socially positive impacts, the model may calculate that a teaching certificate is also worth $30,000 in funding by the state due to the multiplier effect of successfully teaching the next generation.

But degrees that furnish graduates with few skills or outdated capabilities may be valued substantially less and should therefore be subsidized by the state at a lower rate, commensurate to their long-term benefit to Utah's society and economy.

To ensure the state receives the value it pays for, Utah should commission the development of outcomes assessments for graduates at each level. These written and verbal evaluations will assess the extent to which the college has effectively instilled in each student the skills that our community, employers and graduate schools most prize.

With this kind of funding, colleges will align with society's needed outcomes and graduate individuals with the skills of highest demand and contribution. The needed talents are sure to include not only math and science but also such skills as critical thinking, persuasive writing and the ability to apply knowledge in history, psychology, foreign cultures or child development. High-value careers will expand in Utah as employers relocate, grow and flourish by capitalizing on the strength of Utah's graduates, culture and families.

Students will receive the return on investment that they deserve.

Funding colleges based on the long-term benefit to the state will financially motivate schools to equip students with the most valued skills in the most efficient way and in the most efficient amount of time. Higher education enrollment will grow as college learning becomes more obviously pertinent and pathways to meaningful career and societal contribution become clearer to prospective students.

It is time for Utah to create a financial approach that incentivizes and holds accountable our colleges for teaching the skills and capabilities most critical to Utah's long-term societal and economic success.

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