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South Carolina Moves to Define Performance-based Funding Formula for Higher Education

Shortly after taking office in January, South Carolina Gov. Nikki Haley met with presidents of the state’s two- and four-year publicly funded colleges and universities to come up with a new, performance-based funding formula for higher education. She brought four performance indicators to the table: each school’s graduation rates, the percentage of in-state students they serve, their role in state economic development and job placement of graduates.

The presidents added one more: enrollment of “underrepresented populations” of students. Haley has said the state needs to get away from funding colleges and universities based on subjective influences like loyalty from lawmakers or the popularity of their football programs and make the funding formula  performance- and accountability-based.

As the governor undertakes a broad effort to hold higher education more accountable, some presidents say they are concerned they’ll be penalized and hampered in their efforts to serve underrepresented students, who are in many cases underprepared for college. The definition of “underrepresented populations” remains vague, raising questions of how the new funding formula might affect historically Black institutions and small, technical colleges, which often serve high percentages of the state’s minority and rural students.

“We are in the process of defining it,” says Ken Wingate, chairman of the state’s Commission on Higher Education. “It might be based on race, gender in certain fields like engineering, or economically disadvantaged areas of the state.”

While the state has a large African-American population — 28.2 percent of the total population — just 5.6 percent of African-Americans have a bachelor’s degree or higher, according to Census data. Haley, a former state legislator and a Tea Party favorite, will meet with the heads of the state’s 13 comprehensive universities separately from the presidents of the 16 schools in the state’s technical college system. The process of developing a new, performance-based funding formula will extend at least into this summer and is expected to be taken up in the 2012 legislative session for the 2013 budget year, Wingate says.

The pay-for-performance plan isn’t the only option on the table.

“Consolidation (of colleges) is on the fringes of these discussions,” Wingate says. “To what extent can we create greater efficiencies by partnering, by collapsing or pairing this one and that one? To what degree can two- and four-year institutions team up in order to provide services to students in a given geographic area? Maybe one of these University of South Carolina branch two-year campuses is in competition with a technical college in the same general vicinity and we would be getting more mileage out of bringing them together under one roof.”

Merger talk around the country in recent years has often focused on public HBCUs.  Louisiana Governor Bobby Jindal, for instance, has proposed merging historically Black Southern University at New Orleans with the University of New Orleans. Dr. George E. Cooper, president of South Carolina State University, the state’s only four-year HBCU, says he hasn’t been approached with talks of a merger, but is confident his institution can stand up to scrutiny.

“I think we’ll be competitive in this process,” he says.

Haley’s proposal “is not capricious; it does not single us out … it does not treat us in any way that it does not treat any other institution,” Cooper says. “I’m going to be an optimist in these conversations.”

Dr. Ronnie Booth, president of Tri-County Technical College and chairman of the president’s association for the state’s 16 technical colleges, strikes a similar tone.

“Technical colleges serve very well the demographic of South Carolina,” Booth says. “Fifty-five percent of our students are female. Our population is 30-plus percent minority. Our population at our colleges really does look like our community.

“We are glad to be held accountable,” he continues. “[But] it would be nice to see some funding come  with the performance. Political strength of institutions, loyalties, and a lot of that does get involved in how institutions are funded. The Citadel (South Carolina’s military college) was funded at something close to 90 percent of what the previous funding formula says they could get. The technical colleges are funded at about 37 percent of what the formula says we should get. In these last several years, with the major cuts to funding, whatever equity there was has just been tossed out.”

Booth says legislators appreciate the state’s technical colleges for their “feeder” role into universities and for their job training programs. Trident Technical College, for example, is currently training workers for Boeing Co., whose new facility in North Charleston will build Boeing’s new 787 Dreamliners.

“[Former governor Mark Sanford] thought that, along with private colleges, we had way too many campuses in South Carolina,” says Booth. “But you know what? Most of them are full.”

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