Representative Dan Branch, Republican of Dallas and chairman of the House Higher Education Committee, succeeded this session in passing a major bill on a new financing system for institutions of higher education. A system with a large “outcomes-based funding” component has so far garnered significant support. The implementation of such a practice would reward universities for a higher number of graduates, not merely for an increased number of enrolled students. This system is tailored to encourage Texas to meet its 2015 goals, one of which is to increase the number of degrees awarded by 46,000 each year.

Among the supporters of an outcomes-based funding system is Raymund Paredes, the Texas higher-education commissioner. However, there is disagreement as to which specific outcomes to measure and, as a result, how to encourage them.

At the end of the session, Senate Higher Education Committee chairwoman Judith Zaffirini (D-Laredo) insisted that the questions remains “if, not when” Texas might adopt a system of this sort.

The final version of Mr. Branch’s bill that was approved by the full Legislature does not go so far as to actually implement an outcomes-based system, but it provides guidelines for the Texas Higher Education Coordinating Board and gives instructions to return with new proposals next session.

The Coordinating Board’s last proposal would determine financing based on:
- total degrees awarded
- degrees awarded to at-risk students
- degrees awarded to students in critical fields
- surpassing predicted graduation levels (with a penalty for falling short)
Under this proposal, however, the University of Texas at Austin and Texas A&M – two of Texas’ schools producing the greatest number of graduates – seem to lose funding.

Policymakers have encountered other problems in the proposal’s formulation as well. “It’s such a mess – it’s sort of a black box,” admitted Representative Scott Hochberg (D-Houston). “I know the equations have been all laid out, but it’s hard to know what they all mean.” Senator Kirk Watson (D-Austin) had another concern – that universities would end up pitted against one another in a “zero-sum game.” Mr. Watson does not believe that the proposal is without merit; however, he would like to see more time invested to find a better formula.

See story @ http://toptexascolleges.com/uncategorized/texas-reviews-new-higher-education-financing-system/