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Report: Higher ed needs new financial incentives

Copyright © 2018 Albuquerque Journal

TAOS – New Mexico colleges and universities are handing out more degrees, certificates and other credentials since the start of a new funding formula that rewards performance.

But much of the growth is in general studies and lower-level certificates – not in the science, math and health fields that lawmakers had been hoping to encourage, according to analysts working for the Legislative Finance Committee.

A report released Wednesday recommends amending the performance-based funding formula to provide more incentives for colleges and universities to provide the kind of education and training that results in students getting jobs afterward or finishing a bachelor’s degree.

The state Higher Education Department, for instance, could craft more stringent rules on what kinds of certificates are rewarded in the formula – with a focus on credentials that directly promote workforce development, according to the report.

Nonetheless, the LFC analysis found that the number of degrees, certificates and other credentials has climbed 23 percent since fiscal 2012, even as student enrollment has dropped. The performance formula took effect in 2013.

“It seems to be slowly bearing fruit,” Micaela Fischer, an LFC program evaluator, told lawmakers.

But the formula doesn’t appear to be providing the kind of incentives needed to achieve broader higher education goals in New Mexico. For example, neither degrees for at-risk students nor credentials in science, health and similar fields have increased more than the overall average since the formula went into effect, according to the report.

Rep. Jimmie Hall, R-Albuquerque, expressed skepticism about the quality of some certificates issued by colleges, suggesting they’re “feel good” credentials that don’t result in professional success.

“It’s quite easy, I believe, for a community college to game the system offering all these certifications,” Hall said.

Barbara Damron, the state’s secretary of higher education, said New Mexico’s decentralized system of colleges, universities and branches – many run by their own boards – is difficult to manage under the kind of single formula that might work in another state. The system also poses challenges for overseeing the quality of the certificates, she said.

There will also have to be much better data-sharing if lawmakers want to track job placement as part of the formula.

“We have all kinds of systems that don’t talk to each other,” Damron said. “We’re way behind the curve on that.”

Higher education officials also cautioned that the current formula has really only had a chance to work for about two years, given budget cuts and other factors.

In any case, the performance formula affects only a small fraction of the overall funding to higher education each year.

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