TO: TIM NESBITT, CHAIR, HIGHER EDUCATION COORDINATING COMMISSION

COMMISSIONERS, HIGHER EDUCATION COORDINATING COMMISSION

FROM: BEN CANNON, EXECUTIVE DIRECTOR

SUBJECT: UNIVERSITY OUTCOMES BASED FUNDING PROGRESS REPORT AND WEIGHTING RECOMMENDATION

DATE: FEBRUARY 9, 2015

CC: MEMBERS, OUTCOMES-BASED FUNDING TECHNICAL WORKGROUP

Purpose and Overview

This memo outlines the process, background and mechanics of the Student Success and Completion Model

(SSCM) developed in consultation and collaboration with the seven public universities to operationalize

investments in accordance with the HECC’s strategic plan. A brief description of the background, principles

and goals of the workgroup is followed by the structure of the SSCM. The workgroup presented an

operational model and described a set of policy questions to the Funding and Achievement Subcommittee at

its February 5th, 2015 meeting. HECC Staff has incorporated direction and feedback from the Subcommittee

and members of the Outcomes-Based Funding Technical Workgroup (OBF TWG) into a recommended

weighting structure. This recommendation is appended to this document. In order for the workgroup to

continue its efforts at developing an allocation model for implementation in the 2015-16 fiscal year,

preliminary guidance from the Commission is necessary.

Process and Background

The Higher Education Coordinating Commission, acting under ORS 351.735(3)(d) and 351.735(3)(b) to

determine the allocation of the Public University Support Fund (PUSF) to public universities, has undertaken

an effort to redesign the funding allocation model to support its productivity agenda and Oregon’s ambitious

40-40-20 goal. The productivity agenda transitions university funding allocations from the current enrollment-

based system to a student focused outcomes-based funding (OBF) model. OBF TWG, formed in June 2014,

has developed the SSCM which focuses the PUSF on rewarding high quality teaching and learning, student

access, and support systems by targeting student completion. Specifically the SSCM measures and rewards

degree completion at the seven public universities, with particular focus on students in high-demand high-

reward programs and those from the neediest, hardest to reach, and historically underserved populations.

The workgroup includes senior financial, student affairs and academic leaders from each of the seven public

universities, the President of the Interinstitutional Faculty Senate and the President of ASPSU as a

representative of the Oregon Student Association.

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The workgroup was tasked with developing an allocation model which will:

- Reflect the principles and priorities embedded in the strategic plan of the HECC and the OEIB

Equity Lens;

- Focus on student access and success by supporting institutions to enroll, retain, and graduate Oregon

resident students with a particular emphasis on underrepresented populations whose increased

success is necessary to reach Oregon’s attainment goals;

- Encourage completion of high demand and high reward degrees key to Oregon’s economic future;

- Recognize and reward differentiation in institutional mission and scope;

- Use data that is clearly defined and currently available;

- Maintain clarity and simplicity;

- Be phased-in to ensure stability through transition, starting with the 2015-17 biennium.

After much conversation, development, honing and revisions the workgroup produced the mechanical

structure of the SSCM and presented it on December 4th, 2014 and February 5th, 2015 to the HECC’s

Funding and Achievement Subcommittee. The SSCM accommodates the unique institutional context

represented by the seven public universities in Oregon, meets the guidelines promulgated by the HECC and

provides a rational and consistent methodology for allocating the PUSF. The allocation methodology is

congruent with the HECC strategic plan and is designed to incentivize completion of Oregonian resident

students and particularly those least likely to complete today, which is critical to meet the State’s ambitious

40-40-20 attainment goal.

The workgroup is keenly aware and focused on issues of quality in baccalaureate and advanced education. Jeff

Dense, President of the IFS, assisted the workgroup in developing a robust methodology to evaluate quality

in concurrence with recommendations supported by the IFS and subsequently by the Provost’s Council and

appended to this document. The workgroup recommended that the HECC rely on academic experts to

continue this evaluation exercise as it was beyond the scope and ability of the workgroup. Dr. Salam Noor,

Director of Academic Planning and Policy, is convening a group consisting of academic, faculty and student

leaders to develop the evaluation of institutions with institutional boards under ORS 351.061 (2) and ORS

351.061 (2)(c) and will begin meeting in February.

SSCM Structure

The SSCM divides the PUSF into three tranches for allocation purposes: Base, Activity-Based (SCH), and

Outcomes-Base (OBF) portions. Each tranche is discussed in more detail below.

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Base

The Base allocation tranche consists of PUSF resources reserved for specific purposes. Each line item within

the Base allocation is assigned to one of three general categories: Research, Mission, and Regional Support.

Research allocations provide resources for key economic development and innovation needs of the state.

Specifically the research allocation supports sponsored research activities and provides faculty salary support

to promote research activities. Allocation for the Research Base in the model is based on the FY15 allocation

of PUSF and will be adjusted by the lesser of DAS inflation or the year-over-year change in PUSF

appropriations.

Mission allocations provide funding for non-instructional activities that are consistent with the purpose of a

public university and that may be difficult or impractical to account for in outcomes metrics. Examples of

Mission allocations include support for high-cost engineering programs (undergraduate and graduate), the

collaborative OUS nursing program, campus public service programs, OSU’s Veterinary Diagnostic Lab,

health professions programs, and PSU’s NEW Leadership Oregon program, among others. With the

exception of two specific items in the Mission category, allocations in the model are based on the FY15

allocation of PUSF and will be adjusted by the lesser of DAS inflation or the year-over-year change in PUSF

appropriations.. Two additional components have unique calculations: supplemental support for Dual Credit

SCHs and base support for law, pharmacy and veterinary medicine education.

Support for Dual Credit SCH was determined by the workgroup to be vital for continued collaboration

between universities and local school districts to ease and accelerate the transition of students between high

school and college level coursework. Additional allocations are determined on a per SCH basis and vary by

institutions according to the number of Dual Credit SCH completed at each respective institution.

Three professional programs -- law, pharmacy, and veterinary medicine -- receive supplemental support

beyond regular credit-hour and outcomes allocations. By shifting from a high marginal revenue allocation

structure to a set fixed cost low marginal revenue allocation scenario, the SSCM focuses on the stability of

these programs and reducing state-based incentives for growth over time. This came at the advice of those

institutions most directly affected. This base allocation will be adjusted each year for inflation. Students in

professional programs that complete credit hours of instruction and/or earn degrees will continue to earn

SCH and/or OBF allocation at the same rate as closely related non-professional disciplines.

Regional allocations provide resources for the higher cost mission of the four TRU universities which serve a

unique and critical public policy purpose. Regional support promotes access to higher education, provides

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underpinning for those regional institutions whose size does not allow them to capture economies of scale,

and funds retention and graduation-focused efforts. Allocation for the Regional Base in the model is based on

the FY15 allocation of PUSF and will be adjusted by the lesser of DAS inflation or the year-over-year change

in PUSF appropriations.

It is important to note that the amount of base allocation to each institution, except where otherwise noted

above, continues as a holdover from the current Resource Allocation Model (RAM) allocation. The HECC

and universities continue to discuss base funding, including support for the University Shared Services

Enterprise and other expenses incurred due to the dissolution of the Oregon University System and

Chancellor’s Office operations. These discussions recognize that there are additional costs associated with

campus-based operations because of the need to account for changes in governance and operational

structure.

The PUSF appropriation amount that remains after disbursement of the Base allocation provides resources

for the Activity-Based (SCH) allocation and the Outcomes-Based (OBF) allocation. The percentage-based

division between SCH and OBF within the model is a policy decision of the Commission. The capability of

varying the levels during the implementation phase has been discussed by the OBF TWG as a tool to aid in

easing the transition between the RAM and SSCM models.

Activity-Based Allocation

Inclusion of an Activity-Based component in the SSCM recognizes the ongoing significance of course

completion by students and provides an opportunity to smooth the transition to an allocation method that

emphasizes the successful outcomes for resident students as reflected in degree and certificate completion.

Computation of the SCH allocation involves two factors: the three-year average of SCH generation (by CIP

code) of an institution and a cost-of-instruction factor. The cost-of-instruction factor is a staple of the RAM

and recognizes that instructional costs are not equal in all academic disciplines, nor between course and

degree levels.

An index is created of an institution’s total SCH output by considering the number of completed SCHs and

the cost-of-instruction factor for the associated SCH level and type. This is compared to the same index for

all institutions and a proportional allocation from the SCH allocation pool is assigned to each institution.

Outcomes-Based Allocation

The primary driver of the OBF allocation is degree generation. Similar to SCH, each degree represents a

unique share of the OBF allocation determined by the relative cost-of-instruction and academic level of the

degree (BA, Master’s PhD, Professional, etc.). Two additional factors are involved to support access and

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equity as well as priority degree types. Degrees in high demand high-reward disciplines (STEM, Health, and

Bilingual Education) are awarded additional resources. Similarly, degree completions by students who

represent one or more traditionally underserved student populations (Veterans, low income, rural, or under-

represented minority students) are assigned additional resources. Using a three-year average of degree

production, the model calculates the total relative value of all degrees awarded by each of the institutions.

These values drive the proportional distribution of the OBF allocation portion within the SSCM.

Transition Tools

Included in the mechanics of the model are both a Stop-Gain and a Stop-Loss function designed to smooth

year-to-year allocation differences for institutions. The Stop-Loss and Stop-Gain may be used during the

transition period to mitigate positive and/or negative shocks to institutions that would experience large year-

to-year swings in allocations if the model were fully implemented in FY16.

The Stop-Loss, which can either be a positive or negative percentage, provides assurance that an institution

will not experience a dramatic decrease in allocation compared to the prior year. If the Stop-Loss is triggered,

all institutions that receive an allocation change that exceeds the Stop-Loss threshold contribute a

proportional amount of allocation to those institutions whose allocation fell below the Stop-Loss threshold.

Only the allocation amount required to bring all institutions at or above the Stop-Loss threshold is re-

distributed.

Similarly, the Stop-Gain, is designed to prevent an institution from receiving a positive spike in allocation in

excess of a pre-determined threshold when compared to the prior year. If the Stop-Gain is triggered, the

excess allocation from the triggering institution is re-distributed proportionally to all non-triggering

institutions. Only the amount of allocation necessary to bring all institutions within the Stop-Gain threshold

is re-distributed.

Policy Questions for the HECC

The OBF workgroup continues to meet and has shifted focus from the development of the SSCM to

principles and mechanics of implementation and transition. All members of the workgroup are in agreement

that the transition from the current enrollment-based model to a student success-focused model should

balance decisive and deliberate implementation with ensuring that institutions have sufficient time and fiscal

space to adjust. This process will require that institutions develop an understanding of model operations, and

adapt institutional strategy to greater emphasize student completion. All facets of the SSCM will require

HECC approval and adoption before allocations can be made for the 2015-2016 fiscal year. The following

table outlines these items, and schedule of progress check-ins with the HECC, potential decision points, and

groups tasked with delivery.

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HECC Discussion Decision Point Lead

Model Structure 2/12/2015 3/12/2015 OBF TWG

Allocation Ratios 2/12/2015 4/9/2015 OBG TWG

Weighting Factors 2/12/2015 4/9/2015 OBF TWG

Base Funding 3/12/2015 4/9/2015 HECC – VPFA

Transition Structure 3/12/2015 4/9/2015 OBF TWG

Information Packet

This document includes the following set of appendices which are integral to the workgroups efforts to

ensure a robust dialogue and well planned transition in shifting from an enrollment focused to a completion

and student success focused allocation model take place.

Page 7 Appendix A: Weighting Factor Recommendation

Page 12 Appendix B: Transition Analysis

Page 39 Appendix C: Outcomes-Based Funding Technical Workgroup Principles and Charge

Page 43 Appendix D: Academic Quality and Evaluation of Institutions with Institutional Boards

Page 55 Appendix E: Timeline to Adoption

Page 57 Appendix F: Workgroup Roster

6

Appendix A:

Weighting Factor Recommendation

7

Weighting Factor Recommendation

Introduction

The Outcomes-Based Funding Technical Workgroup (OBF TWG) and HECC staff have produced the Student Success and

Completion Model (SSCM), which includes outcomes-based parameters that will drive allocation of the Public University

Support Fund. The relative importance, or weight, of those parameters in the SSCM, however, is a policy decision of the

HECC. This document constitutes a tentative recommendation from HECC staff to operationalize Commission feedback and

policy priority using the SSCM model developed by the OBF TWG. These weighting structures will be used as guidance for

the workgroup to develop an implementation plan and finalize details allowing for a thoughtful and structured shift from the

current enrollment-based funding model to one which represents the Commission’s strategic plan and rewards institutions for

their efforts to provide access and completion for all Oregon residents.

The weights used in this recommendation reflect feedback from the HECC Funding and Achievement Subcommittee at its

February 5, 2015 meeting and a subsequent forum between HECC staff and the OBF TWG as summarized below. A detailed

listing of these weights begins on the following page. The settings are designed to accomplish the following:

Align program duration and degree allocation weights. The relative value of degrees within the SSCM should

roughly mirror the relative duration of academic program levels. For example, Bachelor degrees should be waited

approximately twice as much as Master’s degrees, reflecting an expected 4-year program duration versus an expected

2-year program duration.

Provide sufficient resources for targeted student sub-populations. Four historically underserved student sub-

populations are recognized in the SSCM: Veterans, Low-income (Pell eligible), Rural, and under-represented minority

degree completers. Degrees earned by a member of at least one of these population categories often reflect additional

institutional effort which should be offset by an additional funding allocation. The allocation levels recommended,

once fully phased in, are of a magnitude consistent with the additional efforts required by institutions to focus on

those students, as indicated OBF TWG members.

Area of Study Focus – STEM, Bilingual Education, and Health degrees are given special status in the

SSCM, reflecting their relatively high importance to the Oregon economy. This is operationalized by providing

additional allocation for each degree earned in a field of emphasis.

Outcomes Allocation – The SSCM will distribute 60% of non-Base allocation as Outcomes Based Funding

using degrees and degree factors. The remaining 40% of non-Base allocation will be distributed as Activity

Based Funding using student credit hours. This allocation split reflects feedback from both the F&A

Subcommittee and the OBF TWG, and will be phased in over a period of years.

Phase-in period will allow time and fiscal space for all institutions to adjust to and be position to succeed

under the SSCM. Specifically, a graduated increase from a relatively low amount of OBF will increase over time to

the long-term goal of 60% OBF and 40% SCH funding. During the transition period a Stop-Loss mechanism will be

engaged which sets lower-bound of year-over-year change DAS inflation for the first fiscal year and allows for greater

8

change over the transition period. A Stop-Gain mechanism which will be set at a rate greater than the change in PUSF

funding over the transition period.

One mechanical issue of the SSCM as it is presented here that remains to be resolved is the recognition and treatment of 4-

year degree earning transfer students. Members of the HECC F&A Subcommittee expressed interest in developing a model

which prorates the allocation for transfer graduates relative to non-transfer graduates, reflecting both the decreased

institutional effort to produce a transfer graduate and the State investment in the student while at the community college level.

This accommodation is not a part of this analysis and will require further work by the OBF TWG, and may necessitate

adjustments to all weighting structures. The final weighting structure will be approved by the HECC.

Weighting Factor Recommendations

The following tables represent weighting factors designed to operationalize the work of the OBF TWG, and priorities

expressed in the HECC’s strategic plan, and priorities expressed by the Funding and Achievement Subcommittee.

Outcomes-Based Funding and Activity-Based Funding Split:

Outcomes (OBF)/Activity (SCH) Allocation Split

2016 2017 2018 2019 2020 2021 2022+

OBF % 20% 40% 60% 60% 60% 60% 60%

SCH % 80% 60% 40% 40% 40% 40% 40%

Completion Weighting Factors:

Degree Level WeightBaccalaureate Degrees 2.0

Masters Degrees 1.0

Doctoral Degrees 1.4

Professional Degrees 1.0

Graduate Certificates 0.2

Student Populations

Resident Bachelor's OnlyWeight

1 0.8

2 1.0

3 1.1

4 1.2

Area of Study (All

Degrees)Weight

STEM 1.2

Bilingual Education 1.5

Health 1.2

9

Degree Cost-Weighting Factors:

*The OBF TWG is currently assessing the possibility of updating degree cost weighting factors utilizing more recent,

nationally normed, cost study.

CIP Description BA/BS

Master's/Prof./

Grad. Cert. PhD

01 Agriculture 1.85 2.46 2.86

02 Agricultural Sciences (Legacy) 1.85 2.46 2.86

03 Natural Resources, Conservation 1.00 1.27 2.39

04 Architecture 1.85 1.72 2.39

05 Area, Ethnic, Cultural, Gender, Group Studies 1.00 1.27 2.39

09 Communication, Journalism 1.25 1.72 2.86

10 Communications Technologies 1.25 1.72 2.39

11 Computer and Information Science 1.25 2.46 3.61

13 Education 1.25 1.27 2.86

14 Engineering 1.85 2.46 3.61

15 Engineering Technologies 1.85 2.46 2.39

16 Foreign Languages, Literatures, Linguistics 1.00 1.72 2.39

19 Family and Consumer Sciences 1.25 1.72 2.86

22 Legal Professions and Studies 1.00 1.27 2.86

23 English Language and Literature 1.00 1.72 2.86

24 Liberal Arts and Sciences, Humanities 1.00 1.27 2.39

25 Library Science 1.25 1.27 2.39

26 Biological and Biomedical Sciences 1.25 2.46 2.86

27 Mathematics and Statistics 1.00 2.46 2.86

28 Military Science, Leadership, Operational Art 1.00 1.27 2.39

29 Military Technologies 1.00 1.27 2.39

30 Multi/Interdisciplinary Studies 1.25 1.72 3.61

30.01 Biological and Physical Sciences 1.25 1.72 3.61

30.06 Systems Science and Theory 1.25 1.72 3.61

30.08 Mathematics and Computer Science 1.25 1.72 3.61

30.18 Natural Sciences 1.25 1.72 3.61

31 Parks, Rec, Leisure, Fitness Studies 1.85 1.72 2.86

32 Basic Skills, Developmental/Remedial Education 1.00 1.27 2.39

34 Health Related Knowledge and Skills - - -

38 Philosophy and Religious Studies 1.00 1.27 2.86

40 Physical Sciences 1.25 2.46 2.86

41 Science Technologies 1.85 2.46 3.61

42 Psychology 1.00 1.27 2.86

43 Homeland Security, Law Enforce, Protective Services 1.25 1.27 2.86

44 Public Administration and Social Services 1.25 1.27 2.86

45 Social Sciences and History 1.00 1.27 2.86

50 Visual and Performing Arts 1.85 1.72 2.86

51 Health Professions, Related Programs 1.85 1.72 2.39

51.20 Pharmacy 1.25 2.46 2.86

51.24 Veterinary Medicine 1.25 2.46 2.86

52 Business, Mgmt, Marketing, Related Support Srvcs 1.25 1.27 3.61

54 History 1.00 1.27 2.86

9999 Unknown 1.00 1.27 2.39

Shaded CIPs represent Professional degrees and have been adjusted

with a portion of funding in Base

10

Staff Recommendation

Staff recommends Commission adoption of the tentative SSCM weighting structure and policy direction as outlined above.

This adoption does not constitute adoption of the SSCM, but guides further work by the OBF TWG. The workgroup will

explore options for recognizing and differentially weighting transfer degrees. Following additional workgroup discussions, the

Executive Director will bring a final proposal to the Commission for approval.

11

Appendix B:

Transition Analysis

12

Transition Analysis

This document presents an analysis of a tentative weighting scheme proposed by HECC staff and estimates its impact on

institution allocations relative to FY15 RAM funding levels. Separate analyses are made, first using the GRB and then using

the Co-Chairs’ Budget Framework. Parameters of each analysis include:

Two scenarios are presented: Raw and Modified, demonstrating the effect of fully implementing the model with no

transition planning and the impact of Stop-Loss and Stop-Gain provisions as well as the graduated shift from the

RAM model to higher proportions of OBF allocations.

The Modified scenario is a phased-in approach and demonstrates the intended path of the Weighting

Recommendation. The Raw scenario assumes immediate, full OBF implementation and is provided to demonstrate

the impact of the phased-in Modified approach. The Scenarios are summarized below:

Scenario 2016 2017 2018 2019+

Raw

SCH 40% 40% 40% 40%

OBF 60% 60% 60% 60%

Mo

dif

ied

SCH 80% 60% 40% 40%

OBF 20% 40% 60% 60%

Scenario 2016 2017 2018 2019 2020

Raw

Stop-Loss N/A N/A N/A N/A N/A

Stop-Gain N/A N/A N/A N/A N/A

Mo

dif

ied

Stop-Loss 3% 2% 1% 0% N/A

Stop-Gain 10.1%* 20% 30% 40% N/A

* FY16 Stop-Gain is 1.5 times FY15 to FY16 percent change in PUSF funding level. The figure presented assumes GRB for FY16.

The Raw approach fully implements the SSCM without dampening the effect of a structured transition period. Under

the Raw approach the SSCM is assumed to be implemented in FY16 without a transition period (60% of non-Base

allocation pool will be distributed according to degree production (OBF), 40% according to Student Credit Hour

(SCH) production). Neither the Stop-Loss nor Stop-Gain mechanisms are engaged, thus, no re-distributions will

occur.

Degree and SCH production of each institution is assumed to remain constant during the forecast period. Student

Characteristic data also is unchanged during the forecast period.

For each potential PUSF funding level (GRB and Co Chairs’), 49% is available in the first year of the biennia and 51%

is available second.

13

The transition analysis assumes Oregon Office of Economic Analysis General Fund revenue estimates and that the

PUSF receive the same proportional share of general fund revenue as in 2015-17.

The following graph and table summarize the projected FY16 allocation levels:

EOU OIT OSU PSU SOU UO WOU

FY15 RAM $16,090,954 $19,788,876 $88,781,387 $59,716,834 $16,395,459 $52,539,257 $17,094,584

FY16 SSCM Modified $16,794,294 $20,715,276 $94,087,210 $65,739,812 $17,112,109 $55,534,629 $18,606,027

FY16 SSCM RAW $14,963,685 $20,632,232 $90,617,581 $72,444,990 $16,241,581 $54,758,177 $18,931,109

EOU OIT OSU PSU SOU UO WOU

FY15 RAM $16,090,954 $19,788,876 $88,781,387 $59,716,834 $16,395,459 $52,539,257 $17,094,584

FY16 SSCM Modified $16,851,910 $21,652,797 $101,373,573 $73,213,260 $17,658,535 $60,273,625 $20,126,300

FY16 SSCM RAW $15,704,806 $21,605,177 $97,675,655 $79,015,456 $17,240,014 $59,603,676 $20,305,217

Total Allocation - GRB

Total Allocation - Co Chairs'

14

EOU OIT OSU PSU SOU UO WOU

Modifed 4.4% 4.7% 6.0% 10.1% 4.4% 5.7% 8.8%

Raw -7.0% 4.3% 2.1% 21.3% -0.9% 4.2% 10.7%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

Raw & Modified vs. FY15 RAM (GRB)

EOU OIT OSU PSU SOU UO WOU

Modifed 4.7% 9.4% 14.2% 22.6% 7.7% 14.7% 17.7%

Raw -2.4% 9.2% 10.0% 32.3% 5.2% 13.4% 18.8%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

Raw & Modified vs. FY15 RAM (Co-Chairs')

15

2016 2017 2018 2019 2020

EOU 12.28% 10.45% 7.48% 3.65% 0.00%

OIT 0.42% -0.60% -0.38% -0.18% 0.00%

OSU 3.83% 1.76% -0.17% -0.19% 0.00%

PSU -9.27% -4.66% -0.92% -0.23% 0.00%

SOU 5.38% 3.51% 0.54% -0.15% 0.00%

UO 1.41% 0.07% -0.38% -0.20% 0.00%

WOU -1.72% -1.32% -0.51% -0.20% 0.00%

-15.00%

-10.00%

-5.00%

0.00%

5.00%

10.00%

15.00%P

erc

en

t o

f A

lloca

tio

n d

eri

ved

fro

m S

L/SG

an

d O

BF/

SCH

sp

lit

Stop-Loss/Stop-Gain & OBF/SCH split impacts (Modified vs. Raw, GRB)

2016 2017 2018 2019 2020

EOU 7.35% 5.58% 2.72% 0.00% 0.00%

OIT 0.23% -0.54% -0.13% 0.00% 0.00%

OSU 3.79% 1.72% -0.06% 0.00% 0.00%

PSU -7.36% -3.15% -0.27% 0.00% 0.00%

SOU 2.44% 0.60% -0.10% 0.00% 0.00%

UO 1.12% 0.19% -0.13% 0.00% 0.00%

WOU -0.88% -0.77% -0.16% 0.00% 0.00%

-10.00%

-8.00%

-6.00%

-4.00%

-2.00%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

Pe

rce

nt

of

Allo

cati

on

de

rive

d f

rom

SL/

SG a

nd

OB

F/SC

H s

plit

Stop Loss/Stop Gain & OBF/SCH split impacts (Modified vs. Raw, GRB)

16

Section 1:

Projection Detail (GRB)

17

Raw (GRB)

Degree Level WeightNon-Base

Dollars Allocated

% of Total

Appropriations

Non-Base

$/DegreeBaccalaureate Degrees 2.0 96,747,156$ 33.5% 7,853$

Masters Degrees 1.0 10,780,377$ 3.7% 4,556$

Doctoral Degrees 1.4 5,578,914$ 1.9% 12,518$

Professional Degrees 1.0 1,074,032$ 0.4% 6,137$

Graduate Certificates 0.2 1,102,518$ 0.4% 803$

Totals: 115,282,998$ 39.9%

Student Populations

Resident Bachelor's

Only

WeightNon-Base

Dollars Allocated

% of Total

Appropriations

Non-Base

$/Occurrence

1 0.8 14,028,413$ 4.9% 2,431$

2 1.0 4,953,135$ 1.7% 3,039$

3 1.1 408,912$ 0.1% 3,343$

4 1.2 16,409$ 0.0% 3,646$

Totals: 19,406,870$ 6.7%

Area of Study (All

Degrees)Weight

Non-Base

Dollars Allocated

% of Total

Appropriations

Non-Base

$/OccurrenceSTEM 1.2 4,999,719$ 1.7% 1,777$

Bilingual Education 1.5 1,519$ 0.0% 760$

Health 1.2 1,777,617$ 0.6% 2,006$

Totals: 6,778,855$ 2.3%

-7.0%

4.3% 2.1%

21.3%

-0.9%

4.2%

10.7%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

Raw GRB vs. FY15 RAM

EOU OIT OSU PSU SOU UO WOU

18

Modified (GRB)

Degree Level WeightNon-Base

Dollars Allocated

% of Total

Appropriations

Non-Base

$/DegreeBaccalaureate Degrees 2.0 32,249,052$ 11.2% 2,618$

Masters Degrees 1.0 3,593,459$ 1.2% 1,519$

Doctoral Degrees 1.4 1,859,638$ 0.6% 4,173$

Professional Degrees 1.0 358,011$ 0.1% 2,046$

Graduate Certificates 0.2 367,506$ 0.1% 268$

Totals: 38,427,666$ 13.3%

Student Populations

Resident Bachelor's

Only

WeightNon-Base

Dollars Allocated

% of Total

Appropriations

Non-Base

$/Occurrence

1 0.8 4,676,138$ 1.6% 810$

2 1.0 1,651,045$ 0.6% 1,013$

3 1.1 136,304$ 0.0% 1,114$

4 1.2 5,470$ 0.0% 1,215$

Totals: 6,468,957$ 2.2%

Area of Study (All

Degrees)Weight

Non-Base

Dollars Allocated

% of Total

Appropriations

Non-Base

$/OccurrenceSTEM 1.2 1,666,573$ 0.6% 592$

Bilingual Education 1.5 506$ 0.0% 253$

Health 1.2 592,539$ 0.2% 669$

Totals: 2,259,618$ 0.8%

4.4% 4.7% 6.0%

10.1%

4.4% 5.7% 8.8%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

Modified GRB vs. FY15 RAM

EOU OIT OSU PSU SOU UO WOU

19

EOU OIT OSU PSU SOU UO WOU

Modifed 4.4% 4.7% 6.0% 10.1% 4.4% 5.7% 8.8%

Raw -7.0% 4.3% 2.1% 21.3% -0.9% 4.2% 10.7%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

Raw & Modified vs. FY15 RAM (GRB)

12.23%

0.40%

3.83%

-9.26%

5.36%

1.42%

-1.72%

-15.00%

-10.00%

-5.00%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

Modified vs. RAW (GRB)

EOU OIT OSU PSU SOU UO WOU

20

EOU OIT OSU PSU SOU UO WOU

FY15 RAM $16,090,954 $19,788,876 $88,781,387 $59,716,834 $16,395,459 $52,539,257 $17,094,584

FY16 SSCM Modified $16,794,294 $20,715,276 $94,087,210 $65,739,812 $17,112,109 $55,534,629 $18,606,027

FY16 SSCM RAW $14,963,685 $20,632,232 $90,617,581 $72,444,990 $16,241,581 $54,758,177 $18,931,109

Total Allocation - GRB

21

Section 2

Transition (GRB)

22

GRB Transition Assumptions:

2016 2017 2018 2019 2020 2021 2022+

Stop Loss 3% 2% 1% 0% N/A N/A N/A

Stop Gain 10.1% 20% 30% 40% N/A N/A N/A

SCH % 80% 60% 40% 40% 40% 40% 40%

OBF % 20% 40% 60% 60% 60% 60% 60%

MODIFIED

2016 2017 2018 2019 2020

EOU 12.28% 10.45% 7.48% 3.65% 0.00%

OIT 0.42% -0.60% -0.38% -0.18% 0.00%

OSU 3.83% 1.76% -0.17% -0.19% 0.00%

PSU -9.27% -4.66% -0.92% -0.23% 0.00%

SOU 5.38% 3.51% 0.54% -0.15% 0.00%

UO 1.41% 0.07% -0.38% -0.20% 0.00%

WOU -1.72% -1.32% -0.51% -0.20% 0.00%

-15.00%

-10.00%

-5.00%

0.00%

5.00%

10.00%

15.00%

Pe

rce

nt

of

Allo

cati

on

de

rive

d f

rom

SL/

SG a

nd

OB

F/SC

H s

plit

Stop-Loss/Stop-Gain & OBF/SCH split impacts (Modified vs. Raw, GRB)

23

2015 2016 2017 2018 2019 2020 2021 2022 2023

Raw $16,090 $14,958 $15,509 $16,097 $16,691 $17,531 $18,180 $19,100 $19,809

Modified $16,090 $16,794 $17,130 $17,301 $17,301 $17,531 $18,180 $19,100 $19,809

$-

$5,000

$10,000

$15,000

$20,000

$25,000

Tho

usa

nd

s

EOU

2015 2016 2017 2018 2019 2020 2021 2022 2023

Raw $19,788 $20,624 $21,377 $22,180 $22,991 $24,126 $25,011 $26,253 $27,219

Modified $19,788 $20,710 $21,248 $22,095 $22,950 $24,126 $25,011 $26,253 $27,219

$-

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

Tho

usa

nd

s

OIT

24

2015 2016 2017 2018 2019 2020 2021 2022 2023

Raw $88,781 $90,617 $94,312 $98,311 $102,32 $108,61 $113,04 $120,00 $124,90

Modified $88,781 $94,087 $95,969 $98,149 $102,13 $108,61 $113,04 $120,00 $124,90

$-

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

Tho

usa

nd

s

OSU

2015 2016 2017 2018 2019 2020 2021 2022 2023

Raw $59,716, $72,456, $75,539, $78,894, $82,247, $87,720, $91,442, $97,506, $101,636

Modified $59,716, $65,739, $72,019, $78,170, $82,061, $87,720, $91,442, $97,506, $101,636

$-

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

Tho

usa

nd

s

PSU

25

2015 2016 2017 2018 2019 2020 2021 2022 2023

Raw $16,395 $16,238 $16,863 $17,534 $18,210 $19,213 $19,955 $21,059 $21,874

Modified $16,395 $17,112 $17,454 $17,629 $18,184 $19,213 $19,955 $21,059 $21,874

$-

$5,000

$10,000

$15,000

$20,000

$25,000

Tho

usa

nd

s

SOU

2015 2016 2017 2018 2019 2020 2021 2022 2023

Raw $52,539 $54,765 $57,078 $59,594 $62,109 $66,189 $68,978 $73,497 $76,590

Modified $52,539 $55,539 $57,117 $59,370 $61,984 $66,189 $68,978 $73,497 $76,590

$-

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

$90,000

Tho

usa

nd

s

UO

26

2015 2016 2017 2018 2019 2020 2021 2022 2023

Raw $17,094 $18,929 $19,687 $20,506 $21,327 $22,596 $23,501 $24,901 $25,900

Modified $17,094 $18,604 $19,428 $20,402 $21,285 $22,596 $23,501 $24,901 $25,900

$-

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

Tho

usa

nd

s

WOU

PUSF % Change

2015-17 588,957,868$

2017-19 639,019,287$ 8.50%

2019-21 706,116,312$ 10.50%

2021-23 780,258,525$ 10.50%

PUSF Biennium Detail

PUSF % change

2016 288,589,355$ 6.70%

2017 300,368,513$ 4.08%

2018 313,119,451$ 4.25%

2019 325,899,836$ 4.08%

2020 345,996,993$ 6.17%

2021 360,119,319$ 4.08%

2022 382,326,677$ 6.17%

2023 397,931,848$ 4.08%

PUSF Fiscal Year Detail

27

Section 3

Projection Detail (Co-Chairs’)

28

Raw (Co Chairs’)

Degree Level WeightNon-Base

Dollars Allocated

% of Total

Appropriations

Non-Base

$/DegreeBaccalaureate Degrees 2.0 106,004,374$ 34.1% 8,604$

Masters Degrees 1.0 11,811,894$ 3.8% 4,992$

Doctoral Degrees 1.4 6,112,730$ 2.0% 13,716$

Professional Degrees 1.0 1,176,801$ 0.4% 6,725$

Graduate Certificates 0.2 1,208,013$ 0.4% 879$

Totals: 126,313,812$ 40.6%

Student Populations

Resident Bachelor's

Only

WeightNon-Base

Dollars Allocated

% of Total

Appropriations

Non-Base

$/Occurrence

1 0.8 15,370,717$ 4.9% 2,664$

2 1.0 5,427,074$ 1.7% 3,329$

3 1.1 448,039$ 0.1% 3,662$

4 1.2 17,979$ 0.0% 3,995$

Totals: 21,263,810$ 6.8%

Area of Study (All

Degrees)Weight

Non-Base

Dollars Allocated

% of Total

Appropriations

Non-Base

$/OccurrenceSTEM 1.2 5,478,115$ 1.8% 1,947$

Bilingual Education 1.5 1,665$ 0.0% 832$

Health 1.2 1,947,707$ 0.6% 2,197$

Totals: 7,427,487$ 2.4%

-2.4%

9.2% 10.0%

32.3%

5.2%

13.4%

18.8%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

Raw Co-Chairs vs. FY15 RAM

EOU OIT OSU PSU SOU UO WOU

29

Modified (Co Chairs’)

Degree Level WeightNon-Base

Dollars Allocated

% of Total

Appropriations

Non-Base

$/DegreeBaccalaureate Degrees 2.0 35,334,791$ 11.4% 2,868$

Masters Degrees 1.0 3,937,298$ 1.3% 1,664$

Doctoral Degrees 1.4 2,037,577$ 0.7% 4,572$

Professional Degrees 1.0 392,267$ 0.1% 2,242$

Graduate Certificates 0.2 402,671$ 0.1% 293$

Totals: 42,104,604$ 13.5%

Student Populations

Resident Bachelor's

Only

WeightNon-Base

Dollars Allocated

% of Total

Appropriations

Non-Base

$/Occurrence

1 0.8 5,123,572$ 1.6% 888$

2 1.0 1,809,025$ 0.6% 1,110$

3 1.1 149,346$ 0.0% 1,221$

4 1.2 5,993$ 0.0% 1,332$

Totals: 7,087,937$ 2.3%

Area of Study (All

Degrees)Weight

Non-Base

Dollars Allocated

% of Total

Appropriations

Non-Base

$/OccurrenceSTEM 1.2 1,826,038$ 0.6% 649$

Bilingual Education 1.5 555$ 0.0% 277$

Health 1.2 649,236$ 0.2% 732$

Totals: 2,475,829$ 0.8%

4.7%

9.4%

14.2%

22.6%

7.7%

14.7% 17.7%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

Modified Co-Chairs' vs. FY15 RAM

EOU OIT OSU PSU SOU UO WOU

30

EOU OIT OSU PSU SOU UO WOU

Modifed 4.7% 9.4% 14.2% 22.6% 7.7% 14.7% 17.7%

Raw -2.4% 9.2% 10.0% 32.3% 5.2% 13.4% 18.8%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

Raw & Modified vs. FY15 RAM (Co-Chairs')

7.30%

0.22%

3.79%

-7.34%

2.43% 1.12%

-0.88%

-15.00%

-10.00%

-5.00%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

SSCM Modified vs. RAW (Co-Chairs')

EOU OIT OSU PSU SOU UO WOU

31

EOU OIT OSU PSU SOU UO WOU

FY15 RAM $16,090,954 $19,788,876 $88,781,387 $59,716,834 $16,395,459 $52,539,257 $17,094,584

FY16 SSCM Modified $16,851,910 $21,652,797 $101,373,573 $73,213,260 $17,658,535 $60,273,625 $20,126,300

FY16 SSCM RAW $15,704,806 $21,605,177 $97,675,655 $79,015,456 $17,240,014 $59,603,676 $20,305,217

Total Allocation - Co Chairs'

32

Section 4

Transition (Co-Chair’s)

33

Co-Chairs Transition Assumptions:

2016 2017 2018 2019 2020 2021 2022+

Stop Loss 3% 2% 1% 0% N/A N/A N/A

Stop Gain 23% 33% 43% 53% N/A N/A N/A

SCH % 80% 60% 40% 40% 40% 40% 40%

OBF % 20% 40% 60% 60% 60% 60% 60%

MODIFIED

2016 2017 2018 2019 2020

EOU 7.35% 5.58% 2.72% 0.00% 0.00%

OIT 0.23% -0.54% -0.13% 0.00% 0.00%

OSU 3.79% 1.72% -0.06% 0.00% 0.00%

PSU -7.36% -3.15% -0.27% 0.00% 0.00%

SOU 2.44% 0.60% -0.10% 0.00% 0.00%

UO 1.12% 0.19% -0.13% 0.00% 0.00%

WOU -0.88% -0.77% -0.16% 0.00% 0.00%

-10.00%

-8.00%

-6.00%

-4.00%

-2.00%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

Pe

rce

nt

of

Allo

cati

on

de

rive

d f

rom

SL/

SG a

nd

OB

F/SC

H s

plit

Stop Loss/Stop Gain & OBF/SCH split impacts (Modified vs. Raw, Co-Chairs')

34

2015 2016 2017 2018 2019 2020 2021 2022 2023

Raw $16,090, $15,704, $16,281, $16,901, $17,528, $18,420, $19,105, $20,082, $20,831,

Modified $16,090, $16,851, $17,188, $17,360, $17,528, $18,420, $19,105, $20,082, $20,831,

$-

$5,000

$10,000

$15,000

$20,000

$25,000Th

ou

san

ds

EOU

2015 2016 2017 2018 2019 2020 2021 2022 2023

Raw $19,788, $21,605, $22,390, $23,235, $24,090, $25,293, $26,225, $27,542, $28,561,

Modified $19,788, $21,652, $22,270, $23,204, $24,090, $25,293, $26,225, $27,542, $28,561,

$-

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

Tho

usa

nd

s

OIT

35

2015 2016 2017 2018 2019 2020 2021 2022 2023

Raw $88,781 $97,675 $101,65 $105,96 $110,29 $117,08 $121,85 $129,35 $134,63

Modified $88,781 $101,37 $103,40 $105,90 $110,29 $117,08 $121,85 $129,35 $134,63

$-

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

$160,000

Tho

usa

nd

s

OSU

2015 2016 2017 2018 2019 2020 2021 2022 2023

Raw $59,716 $79,015 $82,377 $86,023 $89,667 $95,598 $99,641 $106,21 $110,69

Modified $59,716 $73,213 $79,784 $85,795 $89,667 $95,598 $99,641 $106,21 $110,69

$-

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

Tho

usa

nd

s

PSU

36

2015 2016 2017 2018 2019 2020 2021 2022 2023

Raw $16,395, $17,240, $17,902, $18,618, $19,338, $20,410, $21,201, $22,382, $23,250,

Modified $16,395, $17,658, $18,011, $18,600, $19,338, $20,410, $21,201, $22,382, $23,250,

$-

$5,000

$10,000

$15,000

$20,000

$25,000Th

ou

san

ds

SOU

2015 2016 2017 2018 2019 2020 2021 2022 2023

Raw $52,539, $59,603, $62,121, $64,851, $67,581, $71,998, $75,025, $79,916, $83,271,

Modified $52,539, $60,273, $62,237, $64,768, $67,581, $71,998, $75,025, $79,916, $83,271,

$-

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

$90,000

Tho

usa

nd

s

UO

37

2015 2016 2017 2018 2019 2020 2021 2022 2023

Raw $17,094 $20,305 $21,118 $21,997 $22,879 $24,243 $25,216 $26,721 $27,795

Modified $17,094 $20,126 $20,955 $21,962 $22,879 $24,243 $25,216 $26,721 $27,795

$-

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

Tho

usa

nd

s

WOU

PUSF % Change

2015-17 635,000,000$

2017-19 688,975,000$ 8.50%

2019-21 761,317,375$ 10.50%

2021-23 841,255,699$ 10.50%

Co Chairs' PUSF Biennium Detail

PUSF % change

2016 311,150,000$ 6.70%

2017 323,850,000$ 4.08%

2018 337,597,750$ 4.25%

2019 351,377,250$ 4.08%

2020 373,045,514$ 6.17%

2021 388,271,861$ 4.08%

2022 412,215,293$ 6.17%

2023 429,040,407$ 4.08%

Co Chairs' PUSF Fiscal Year Detail

38

Appendix C:

Outcomes-Based Funding Technical Workgroup Principles and Charge

39

Outcomes-Based Funding Technical Workgroup Charge

Background

Over the past several years the state has embarked on an ambitious reform of its public higher

education enterprise, including SB 242 (2011), SB 909 (2011), SB 270 (2013), and HB 3120

(2013). Together, these reforms have significantly increased autonomy for public universities,

exemplified by the creation of institutional governing boards, while also promoting greater levels

of state coordination across the P-20 continuum, exemplified by the creation of the Oregon

Education Investment Board (OEIB) and the Higher Education Coordinating Commission

(HECC).

The reforms are predicated on Governor Kitzhaber’s “tight-loose” concept, which pushes

operational autonomy and flexibility to the lowest possible level while reserving accountability

and associated state investment at the highest level. The operational flexibility provided for

institutions through the dissolution of the Oregon University System and the creation of

institutional Boards of Trustees can broadly be thought of as the “loose” component. The

creation of the HECC, with its specific authorities to review and approve public university

missions and programs as well as to develop and oversee a funding allocation model by which

the state’s investment in post-secondary education rewards institutional behavior, can be thought

of as the “tight” component.

Recognizing this new operating structure, the HECC, consistent with its strategic plan and the

direction of the Governor and the OEIB, does not believe the current funding allocation model,

which relies on inputs, is ideally suited to an environment in which access and completion are

necessary for the achievement of the state’s ambitious 40-40-20 goal. Accordingly, the HECC’s

2015-17 state funding request to the Governor will endorse an outcomes-based funding

allocation model that is consistent with the principles outlined below.

At the same time, the HECC also acknowledges that current levels of state funding – under any

allocation model – are insufficient for achieving our state’s higher education goals. The success

of outcomes-based funding will rely as much on securing appropriate state funding levels as it

does on optimizing the design of the formula itself.

In order for the HECC to develop an optimum allocation model, HECC staff will convene a

group to develop the allocation model and recommend a phase-in period. This group, the

Outcomes-Based Funding (OBF) Technical Workgroup, will include experts on university

finance, academic affairs and student success representing each public university, university

students and faculty as well as HECC staff. The Workgroup will utilize external expertise to

ensure a robust model uniquely suited to Oregon’s higher education context and vision is

developed.

Goals and Process

By the end of 2014, the Outcomes-Based Funding (OBF) Technical Workgroup will develop a

new model for the allocation of the state’s investment in its comprehensive public universities,

with implementation to begin during the 2015-17 biennium. The allocation model will be

designed to incentivize outcomes that help meet the state’s ambitious 40-40-20 goal. Particular

emphasis will be placed on supporting access and completion for Oregon resident students from

40

underrepresented populations and in particular high value areas of study. The group will

recommend a phase-in period that is aggressive yet allows sufficient time for institutions to

respond effectively and appropriately to a new approach to state investment.

The workgroup will examine research and best practices around existing and proposed

outcomes-based funding models and produce a white paper that recommends to the Executive

Director of the HECC an OBF model that is consistent with the principles articulated in this

document. An independent third-party expert on OBF and higher education will be engaged to

facilitate the workgroup and provide research support. Internal and external expertise from

outside the Workgroup will be utilized as necessary.

The OBF Workgroup will be comprised of the following members:

- Administrator of HECC University Budget & Finance

- Representatives appointed by the Presidents of each of the seven public universities

- A student representative appointed by the Oregon Student Association (OSA)

- A faculty representative appointed by the Interinstitutional Faculty Senate (IFS)

The HECC intends for implementation of this allocation model will begin in the first year of the

2015-17 biennium and continue until 100% of all formula based allocations are incorporated.1

Principles

- The allocation model will reflect the principles and priorities embedded in the strategic

plan of the HECC and the OEIB Equity Lens, including support for access and

completion of Oregon resident students with a particular emphasis on socio-economically

disadvantaged, first generation, diverse and underserved populations and graduates in

high-demand and high-return fields key to Oregon’s economic future;

- The allocation model, once fully implemented, will include all formula-based state

funding;

- Clarity and simplicity will be maintained in the development of an allocation model;

- The allocation model will recognize and reward differentiation in institutional mission

and scope;

- The allocation model will use data that is clearly defined and currently available.

- The allocation model will be phased-in, starting with the 2015-17 biennium.

Technical Workgroup Timeline:

The workgroup will be appointed in May and convene in June, work through the Summer and

Fall of 2014 in order to produce an OBF model for adoption by the HECC before the convening

of regular Legislative Session in February of 2015.

June - Workgroup is formed and holds its inaugural meeting,

1 We presume that the current state practice of allocating some dollars to institutions outside of the formula (eg

ETIC, statewides, research, campus public services) will continue, whether through line-items adopted by the Legislature or by the HECC.

41

discussing HECC expectations, reviews OBF model concepts

and sets calendar.

July - Workgroup discusses institutional outcomes and student sub-

populations and weighting structures. Group accesses national

experts as necessary. Sub-group is formed to produce white-

paper regarding OBF & proposed metrics.

August - Workgroup discusses data definitions for outcomes and

students. Workgroup is provided draft whitepaper for review,

including proposed metrics. OBF Prototype Model framework

is discussed, including metrics and weights.

September - Workgroup reviews & discusses OBF prototype model,

including simulation and sensitivity. Phase-in period is

discussed.

November - Workgroup determines appropriate phase-in period and adjusts

OBF prototype model. Workgroup provides final input on draft

whitepaper.

December - Workgroup produces final whitepaper, OBF model and phase-

in period and forwards to the Executive Director of the HECC

for review and approval.

December/January - Executive Director recommends adoption of OBF model to

Higher Education Coordinating Commission for adoption and

implementation.

42

Appendix D:

Academic Quality and Evaluation of Institutions with Institutional Boards

43

Outcomes-Based Funding Technical Workgroup

Statement on Academic Quality

In order for the State of Oregon to maximize the potential benefits accruing from its ambitious

40-40-20 academic achievement goals, the Higher Education Coordinating Commission (HECC)

recognizes Oregon’s public universities must provide a rigorous and high quality academic

experience. Any diminution of the knowledge and skills currently embedded within degree-

granting programs at Oregon’s public universities countermand the duties and powers of HECC

articulated in Oregon Revised Statutes § 351.735(3). Hence, HECC is committed to an ongoing

partnership with Oregon public universities, faculty and students in ensuring the rigor and quality

of the educational experience for future generations of Oregonians. By focusing the investment

of state resources on student success, HECC will serve to ensure academic quality via

institutional and programmatic accreditation, a profound respect for shared governance and

faculty ownership over the curriculum and, moreover, rewarding institutional investment in

initiatives benefitting student success through an outcomes-based funding model.

Perspectives and Components of Academic Quality

Capacity – Institutional leaders have primary

responsibility to ensure resources (physical

capital, faculty time and expertise, student

support services) are available to support a robust

and rigorous educational enterprise inextricably

linked to each university’s mission.

Process – A wide range of stakeholders seek to

develop a process to ensure students garner

subject area expertise, develop an understanding

of multiple facets of human knowledge, are

imbued with the skills necessary to confront a

changing global economy and are prepared to be engaged participants in our democratic society.

This process includes a diverse range of academic and co-curricular experiences, and ready

access to student services necessary to engage and support students.

Output – Measures such as degree production are intermediate markers which signify the

accomplishment of students, their knowledge, skills and competencies. These outputs rely on the

capacity of institutions and educational processes and signal preparation for future positive

economic, social and civic outcomes.

44

Outcomes - Employers desire college graduates with the ability to think critically, innovate,

communicate articulately and to diverse audiences, solve complex problems, demonstrate

integrity and ethical judgment1.

Policymakers, taxpayers, employers, university leaders, faculty and students all seek educational

outcomes which rest on the bedrock of academic quality. An increased call for accountability of

the academic enterprise by policymakers and the citizenry highlights the benefits of academic

quality in preparing students for life-long success. In order to develop the human and intellectual

capital necessary for a successful and prosperous future, Oregon’s public universities must

remain vigilant in ensuring a quality academic experience for all students by staying on the

cutting edge of academic innovation and providing the support services underscoring student

success.

Committed faculty continually strive to develop student knowledge, skills and abilities relevant

to the 21st century economy via regular engagement in research and professional development

activities which are subsequently incorporated into the curriculum to the benefits of students..

Finally, an institution’s commitment to ongoing and systematic academic quality prepares

students for life-long success while buttressing mission fulfillment efforts.

While there may appear to be divergent views from these stakeholder groups on the meaning of

academic quality, there is, in fact, significant synergy on the importance of academic quality to

the educational enterprise, and more importantly, the future success of Oregon’s public

university graduates. All parties agree on the centrality of the educational process and

commitment of resources necessary to ensure academic quality, and coincidentally student

success. In the absence of a profound commitment to academic excellence, students will not gain

the knowledge and skills necessary to succeed in their careers and as engaged citizens,

employers will look elsewhere for employees of high quality, and the state will not gain the

talent necessary for Oregon’s economy to flourish. Without a robust and rigorous educational

process that incorporates a learned commitment to academic quality in both in-class and out-of-

class experiences, the state’s ambitious 40-40-20 goals will not generate the leaders of tomorrow.

Institutional Efforts to Ensure Academic Quality

The ability of institutions to graduate high numbers of students appears to be gaining traction as

the national measure of higher education success. While the goal of significantly increasing the

number of people with college degrees and certificates, as captured by the state’s ambitious 40-

40-20 goals is laudable, this trend is disturbing because a national drive toward that goal—to the

exclusion of others like academic success–could threaten important principles, including

1 American Association of Colleges and Universities “It Takes More Than A Major: Employer Priorities

for College Learning and Student Success.” April 2013.

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inclusiveness, access and affordability that are crucial to the quality higher education Oregonians

will need to be successful in the 21st century without proper attention.

A more fruitful direction would recognize educational success, like human health, is a complex

systemic process that requires a rich data picture (of both qualitative and quantitative measures)

for full assessment. For higher education to flourish, all our leaders—in government and in

education—must avoid the lure of reductionist measures and simplistic goals that will foster a

false sense of progress now but bitter disappointment at the quality of the results in the future. A

focus on academic quality as an essential component of higher education in Oregon will enhance

the state’s ability to not only meet its 40-40-20 goals, but enable graduates of Oregon public

universities to make an indelible positive contribution on the future of our society. 2

The transition in Oregon higher education from an enrollment based to outputs focused funding

model which focuses state investment around the degree attainment of students is only

meaningful to all stakeholders if degrees granted are underscored by an unwavering commitment

to academic quality. As part of the formulation, adoption and implementation of a redesigned

funding allocation outcomes-based model, the future success of any new budgetary paradigm

must be inextricably linked to academic quality. A means to ensure this connection must be

developed.

2 Campaign for the Future of Higher Education. Principles: Quality Education in the 21

st Century. 2011.

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January 22, 2015 TO: Ben Cannon, Executive Director, HECC FROM: Statewide Provosts Council RE: Statement on Academic Quality The Provosts Council appreciates the opportunity to provide input to the HECC’s Outcomes-Based Funding Technical Workgroup on the issue of academic quality. We concur that Oregon’s public universities must provide a rigorous and high quality academic experience. We endorse the principles outlined by the Outcomes-Based Funding Technical Workgroup that were endorsed on October 4, 2014 by the Interinstitutional Faculty Senate (IFS). On behalf of our university presidents, we outline below how our universities are ensuring and will continue to ensure academic quality. We trust you will see that quality is described and measured in multiple ways and is not a simple quantitative measure that can be built into a formula for funding. The measures and demonstration of academic quality are linked to the evaluation of our institutions and our boards. Below we list the multiple practices that demonstrate how we already ensure and maintain high quality programs and faculty at our institutions. 1. Regional and professional accreditation

By definition, “The mission of the Northwest Commission on Colleges and Universities (NWCCU) is to assure educational quality, enhance institutional effectiveness, and foster continuous improvement of colleges and universities in the Northwest region through analytical institutional self-assessment and critical peer review based upon evaluation criteria that are objectively and equitably applied to institutions with diverse missions, characteristics, and cultures.” The accreditation process is a rigorous one requiring assessments in year 1, 3, and 7 of a seven-year cycle. It relies on institutional self-examination, assessment by external review teams, and final decisions from the board of commissioners.

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Ben Cannon, HECC January 22, 2015 page 2

The NWCCU Standard 2C in-and-of-itself has 13 measures of academic quality (see list on pp. 3-5 of this document). This Standard 2C requires institutions to demonstrate the cohesiveness, effectiveness, and quality of academic programs. In addition to NWCCU regional accreditation, professional programs, including business, education, engineering, forestry, law, pharmacy, public health, and veterinary medicine, may also be accredited by various professional organizations. The accreditation process requires a rigorous external review on a periodic basis, which encompasses an assessment of academic programs, student learning and outcomes, and faculty and infrastructure resources.

2. Academic Program Review Program review requires that academic programs be reviewed on a periodic basis and that learning outcomes be assessed and used for program improvement. Although procedures vary by institution, the process takes a “deep dive” into the quality of programs, resources to support them, demand and outcomes. Many programs include employee surveys and alumni satisfaction surveys as part of the academic review process.

3. National Survey of the Student Experience (NSSE)

Our universities participate in the National Survey of Student Engagement (NSSE), which annually collects information at hundreds of four-year colleges and universities about first-year and senior students' participation in programs and activities that institutions provide for their learning and personal development. The results provide an estimate of how undergraduates spend their time and what they gain from attending college. NSSE provides participating institutions reports that compare their students' responses with those of students at self-selected groups of comparison institutions.

4. Academic Program Approval

All new academic programs are required to go through a program approval process that has three approval levels: University (academic departments, college committees, deans, university committees, faculty senate and provosts), Institutional Board, and Statewide approval (Provosts Council and HECC).

5. Quality of Faculty

The quality of our faculty has a direct impact on the quality of our programs. Our faculty have demonstrated success in securing grant funding, creative inquiry, national awards, publishing in scholarly journals, and teaching quality and effectiveness. In addition, faculty are evaluated on a periodic basis. We have high standards for tenure and promotion and the NWCCU requires that all faculty are evaluated in a regular, systematic, substantive, and collegial manner at least once within every five-year period of service.

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Ben Cannon, HECC January 22, 2015 page 3

6. Advisory Boards

Many colleges and programs have external advisory boards comprised of industry leaders and practitioners. These boards provide input on strategic priorities, curriculum and career opportunities, and enhancing partnerships with industry and other external organizations.

7. Institutional Boards

The OUS Board and Institutional Boards provide oversight to institutional progress towards strategic goals and performance on key outcome measures associated with student success, academic quality, and research and entrepreneurial activities.

From NWCCU Standard 2:

2.C – Education Resources 2.C.1 The institution provides programs, wherever offered and however delivered, with

appropriate content and rigor that are consistent with its mission; culminate in achievement of clearly identified student learning outcomes; and lead to collegiate-level degrees or certificates with designators consistent with program content in recognized fields of study.

2.C.2 The institution identifies and publishes expected course, program, and degree learning outcomes. Expected student learning outcomes for courses, wherever offered and however delivered, are provided in written form to enrolled students.

2.C.3 Credit and degrees, wherever offered and however delivered, are based on documented student achievement and awarded in a manner consistent with institutional policies that reflect generally accepted learning outcomes, norms, or equivalencies in higher education.

2.C.4 Degree programs, wherever offered and however delivered, demonstrate a coherent design with appropriate breadth, depth, sequencing of courses, and synthesis of learning. Admission and graduation requirements are clearly defined and widely published.

2.C.5 Faculty, through well-defined structures and processes with clearly defined authority and responsibilities, exercise a major role in the design, approval, implementation, and revision of the curriculum, and have an active role in the selection of new faculty. Faculty with teaching responsibilities take collective responsibility for fostering and assessing student achievement of clearly identified learning outcomes.

2.C.6 Faculty with teaching responsibilities, in partnership with library and information resources personnel, ensure that the use of library and information resources is integrated into the learning process.

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Ben Cannon, HECC January 22, 2015 page 4

2.C.7 Credit for prior experiential learning, if granted, is: a) guided by approved policies and

procedures; b) awarded only at the undergraduate level to enrolled students; c) limited to a maximum of 25% of the credits needed for a degree; d) awarded only for documented student achievement equivalent to expected learning achievement for courses within the institution’s regular curricular offerings; and e) granted only upon the recommendation of appropriately qualified teaching faculty. Credit granted for prior experiential learning is so identified on students’ transcripts and may not duplicate other credit awarded to the student in fulfillment of degree requirements. The institution makes no assurances regarding the number of credits to be awarded prior to the completion of the institution’s review process.

2.C.8 The final judgment in accepting transfer credit is the responsibility of the receiving institution. Transfer credit is accepted according to procedures which provide adequate safeguards to ensure high academic quality, relevance to the students’ programs, and integrity of the receiving institution’s degrees. In accepting transfer credit, the receiving institution ensures that the credit accepted is appropriate for its programs and comparable in nature, content, academic quality, and level to credit it offers. Where patterns of student enrollment between institutions are identified, the institution develops articulation agreements between the institutions.

Undergraduate Programs

2.C.9 The General Education component of undergraduate programs (if offered) demonstrates an integrated course of study that helps students develop the breadth and depth of intellect to become more effective learners and to prepare them for a productive life of work, citizenship, and personal fulfillment. Baccalaureate degree programs and transfer associate degree programs include a recognizable core of general education that represents an integration of basic knowledge and methodology of the humanities and fine arts, mathematical and natural sciences, and social sciences. Applied undergraduate degree and certificate programs of thirty (30) semester credits or forty-five (45) quarter credits in length contain a recognizable core of related instruction or general education with identified outcomes in the areas of communication, computation, and human relations that align with and support program goals or intended outcomes.

2.C.10 The institution demonstrates that the General Education components of its baccalaureate degree programs (if offered) and transfer associate degree programs (if offered) have identifiable and assessable learning outcomes that are stated in relation to the institution’s mission and learning outcomes for those programs.

2.C.11 The related instruction components of applied degree and certificate programs (if offered) have identifiable and assessable learning outcomes that align with and support program goals or intended outcomes. Related instruction components may be embedded within program curricula or taught in blocks of specialized instruction, but each approach must have clearly identified content and be taught or monitored by teaching faculty who are appropriately qualified in those areas.

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Ben Cannon, HECC January 22, 2015 page 5

Graduate Programs

2.C.12 Graduate programs are consistent with the institution’s mission; are in keeping with the expectations of their respective disciplines and professions; and are described through nomenclature that is appropriate to the levels of graduate and professional degrees offered. They differ from undergraduate programs by requiring greater depth of study and increased demands on student intellectual or creative capacities; knowledge of the literature of the field; and ongoing student engagement in research, scholarship, creative expression, and/or appropriate high-level professional practice.

2.C.13 Graduate admission and retention policies ensure that student qualifications and expectations are compatible with the institution’s mission and the program’s requirements. Transfer of credit is evaluated according to clearly defined policies by faculty with a major commitment to graduate education or by a representative body of faculty responsible for the degree program at the receiving institution.

2.C.14 Graduate credit may be granted for internships, field experiences, and clinical practices that are an integral part of the graduate degree program. Credit toward graduate degrees may not be granted for experiential learning that occurred prior to matriculation into the graduate degree program. Unless the institution structures the graduate learning experience, monitors that learning, and assesses learning achievements, graduate credit is not granted for learning experiences external to the students’ formal graduate programs.

2.C.15 Graduate programs intended to prepare students for research, professional practice, scholarship, or artistic creation are characterized by a high level of expertise, originality, and critical analysis. Programs intended to prepare students for artistic creation are directed toward developing personal expressions of original concepts, interpretations, imagination, thoughts, or feelings. Graduate programs intended to prepare students for research or scholarship are directed toward advancing the frontiers of knowledge by constructing and/or revising theories and creating or applying knowledge. Graduate programs intended to prepare students for professional practice are directed toward developing high levels of knowledge and performance skills directly related to effective practice within the profession.

hhs cc: Presidents Council Provosts Council Salam Noor, HECC Jeff Dense, IFS

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Annual Evaluation of Universities with Governing Boards Project Overview, Background, and Purpose Oregon law directs the HECC to annually evaluate public universities with governing boards. The HECC will work with universities and other partners to develop a comprehensive evaluation framework that meets legislative intent and serves the public’s interest in higher education. A core purpose of the evaluations is to effectively measure institutional performance and success. Evaluations will also serve as a useful mechanism for the state to highlight the quality of higher education in general, while differentiating the unique missions and programs offered at each institution. Information gathered from the evaluation process will be shared with the Legislature annually and provided to the public to learn about Oregon’s universities and their distinctive features. Since mid-2014, the Commission has been working on a “master list” of metrics that can be used to help align legislatively-adopted key performance measures, achievement compacts, outcomes funding measures, and potential institutional “report cards.” The evaluation framework should draw from the master list to the greatest extent possible, although different/additional measures, including ones that are institution-specific, are likely to be necessary. Measuring academic quality should be an integral part of the evaluation framework. Furthermore, the framework should provide focus and consistency for assessing progress to goals for HECC, OEIB, and institutions. A workgroup will be established to develop an evaluation framework for public universities with governing boards. The primary purpose of the work group is to recommend to the HECC a comprehensive evaluation framework as required by the Oregon Legislature. HECC staff will facilitate all meetings and activities for the work group. Meetings will be held once a month and technology will used to facilitate ongoing interactions and communication between work group members. Faculty and staff will be engaged at several junctures to solicit feedback and input on process and products. Workgroup recommendations will be advisory to the Executive Director. HECC staff will make a final recommendation to the Commission for an evaluation framework in summer, 2015. The Commission-adopted framework will be employed in Fall 2015 for evaluations of the three institutions whose boards assumed governance responsibility July 1, 2014 (UO, OSU, and PSU). All seven public institutions will be evaluated annually using the framework starting in Fall 2016. The work group will convene January 2015 – June 2015 and will use the following legislative guidance to frame its work and outcomes: ORS 352.061(2) stipulates that the HECC’s evaluations of universities must include:

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A report on the university’s achievement of outcomes, measures of progress, goals and targets as described in the university’s achievement compact with the Oregon Education Investment Board;

An assessment of the university’s progress toward achieving the mission of all education beyond high school as described in ORS 351.009 (the 40-40-20 goal); and

An assessment as to how well the establishment of a governing board at the university comports with the findings set forth in ORS 352.025.

ORS 352.061(2)(c) also requires that the HECC assess university governing boards against the findings set forth in ORS 352.025, including that governing boards:

Provide transparency, public accountability and support for the university.

Are close to and closely focused on the individual university.

Do not negatively impact public universities that do not have governing boards.

Lead to greater access and affordability for Oregon residents and do not disadvantage Oregon students relative to out-of-state students.

Act in the best interests of both the university and the State of Oregon as a whole.

Promote the academic success of students in support of the mission of all education beyond high school as described in ORS 351.009 (the 40-40-20 goal).

ORS 352.025 notes four additional Legislative findings:

Even with universities with governing boards, there are economy-of-scale benefits to having a coordinated university system.

Even with universities with governing boards, shared services may continue to be shared among universities.

Legal title to all real property, whether acquired before or after the creation of a governing board, through state funding, revenue bonds or philanthropy, shall be taken and held in the name of the State of Oregon, acting by and through the governing board.

The Legislative Assembly has a responsibility to monitor the success of governing boards at fulfilling their missions, their compacts and the principles stated in this section.

Outcomes

Identify and refine key metrics and performance measures for the evaluation of universities with governing boards

Ensure academic quality is an integral component of the evaluation framework.

Identify multiple metrics as appropriate to each institution focusing on process, capacity, externally validated measures and long-term outcomes of graduates.

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Ensure alignment with KPMs, achievement compact measures, and NWCCU - approved

institutional core themes.

Ensure that the framework includes consideration of legislative findings in ORS 352.025. Deliverables

Evaluation framework for public universities with governing boards.

Evaluation process and timeline.

Revised Achievement Compacts for public universities.

Alignment of university mission and programs. Work Group Membership Frances Bonet, UO Brad Burda, OIT Steve Scheck, WOU Susan Walsh, SOU Sarah Witte, EOU Sona Andrews, PSU Sabah Randhawa, OSU Helen Stampe, OUS Bob Kieran, OUS Jeff Dense, IFS, (EOU) Maude Hines, IFS (PSU) Student, OSA Donna Lewelling, HECC Dana Richardson, HECC Kirby Dyess, HECC Commissioner Salam Noor, HECC Possible evaluator from EdNW

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Appendix E:

Timeline to Adoption

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Timeline to Adoption

1/14 OBF TWG OAR review, Scenario discussion

1/15 Public Hearing Notice Filed OAR 715-013-0025 (SSCM Structure)

1/21 VPFA Meeting OBF update, Base and USSE discussion

1/24 OBF TWG Phase in principles and discussion

1/26 HECC F&A Brief update on progress

2/5 HECC F&A OBF scenario discussion

2/6 OBF TWG Discuss HECC F&A feedback and advise staff

2/7-8 Staff Issue preliminary weighting recommendation

2/9 OBF TWG Give feedback and discuss weighting

recommendation

2/9 Staff Staff issues weighting recommendation

2/12 HECC Full Commission Makes policy decision and instructs workgroup

2/13 Public Hearing Notice Filed OAR 715-xx-xxxx (Weighting & Values)

2/17 Public Hearing OAR 715-013-0025 (SSCM Structure)

2/-- VPFA Meeting Update on OBF and discuss base allocation

2/-- OBF TWG Continue phase in discussion

2/20 Public Comment Period Closes OAR 715-013-0025 (SSCM Structure)

3/5 HECC F&A Meeting Review OAR and discuss public comment

3/6 Staff Final rule sent to HECC Commissioners

3/12 HECC Full Commission Potential OAR 715-013-0025 (SSCM Structure)

adoption

3/16 Public Hearing OAR 715-xx-xxxx (Weighting & Values)

3/-- OBF TWG Continues implementation refinement

4/9 HECC Full Commission Potential OAR 715-xx-xxxx (Weighting & Values)

adoption

6/11 HECC Full Commission Adopt FY 16 budget

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Appendix F:

Outcomes-Based Funding Technical Workgroup Roster

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Outcomes-Based Funding Technical Workgroup Roster

Sherm Bloomer Oregon State University

Director, Budget and Fiscal Planning

Brad Burda Oregon Tech

Provost and Vice-President for Academic Affairs

Jeff Dense Interinstitutional Faculty Senate

President

Brian Fox Higher Education Coordinating Commission

Administrator, University Budget and Finance

Jan Lewis Oregon State University

Director, Administrative Services

David McDonald Western Oregon University

Associate Provost

Lara Moore Eastern Oregon University

Vice-President, Finance and Administration

Craig Morris Southern Oregon University

Vice-President, Finance and Administration

Eric Noll Oregon Student Association

President

Kevin Reynolds Portland State University

Vice-President, Finance and Administration

Brad Shelton University of Oregon

Interim Vice-President, Research and Innovation

Sarah Witte Eastern Oregon University

Interim Provost and Senior Vice-President Academic Affairs

Mary Ann Zemke Oregon Tech

Vice-President, Finance and Administration

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