Graduation Rates May Trump Enrollment Numbers
This funding system, currently used by Tennessee and being considered by other states, gets away from the traditional enrollment-based funding model. This renewed focus on awarding credentials and degrees has been attributed to the commitment from many states to increase their number of degree holders–a move made to ensure their citizens could be competitive in today’s job market.
As this type of policy becomes more widespread, there is some concern about issues resulting from pressuring universities to increase their graduation rates. There is speculation that the quality of teaching and learning could be compromised in order to move students along to finish their degrees. Further, the current measure for graduation rates does not account for students who take more than 150 percent of the allotted time to complete their degree. This discounts students who take over six years to complete a four-year degree, and students who take more than three years to complete a two-year degree.
However, despite the concerns, the American Association of State Colleges and Universities estimates that over 30 states have at least contemplated using performance measures to allocate funding for higher education institutions.