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Institute for Higher Education Leadership & Policy
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Finance

    Financing California’s public higher education system has become a primary concern of policy makers in this time of growth in the college-age population, significant demographic change in that population, and continuing fiscal constraints that limit available resources. State finance policies and mechanisms provide powerful incentives for both students and higher education institutions. The Institute’s work in this area is focused on ensuring that California’s finance policies, including state appropriations, financial aid, and tuition policies, are structured in a way that maximizes the state’s return on its investment in higher education. Specific efforts have included:

  • Performing an audit of current finance policies that govern the community colleges, defined broadly to include policies affecting state appropriations, the distribution of those funds across and within campuses, student fees, and financial aid, to determine the incentives embedded in those policies;

  • Participating, along with legislative staff and the Campaign for College Opportunity, in the Changing Direction project sponsored by the Western Interstate Commission on Higher Education (WICHE), which is aimed at helping states develop better higher education finance policies;

  • Analyzing the various dimensions of the challenge California is facing to finance its higher education system, and how a combination of state appropriations, student fee revenues and increased efficiencies might offer a solution;

  • Comparing the funding mechanism for adult education in California with those in several other states, and examining whether allocation methods in California match the needs for adult education services.

Publications

Presentations

Dollars and Sense: Analysis of Spending and Revenue Patterns to Inform Fiscal Planning for California Higher Education
September 2011
This report uses data from the Delta Project on Postsecondary Education Costs, Productivity, and Accountability to analyze revenue and spending patterns across California higher education. The report compares patterns across California’s three public higher education systems (University of California, California State University and the California Community Colleges), documents changes over a seven-year period for which data are available (2002-2009), and compares California to the rest of the nation. The report documents several unique characteristics of California higher education including the largest disparity in the nation in educational expenditures per student between the research university sector and the community college sector and a very low share (one-tenth) of educational costs covered through community college tuition compared to the national average of one-third. Documented trends within California higher education include steep declines in state subsidies for UC and CSU and large tuition increases, such that students at those two segments are paying a much larger share of their educational costs, and incremental gains in degree productivity at all three segments that fall well short of state needs. Researchers conclude that policymakers’ traditional approach to fiscal planning is inadequate for today’s challenges and recommend greater transparency in spending and revenues and a more strategic and state-wide approach to financing higher education.

Performance Incentives to Improve Community College Completion: Learning from Washington State's Student Achievement Initiative
March 2011
A policy brief, jointly produced by IHELP and the Community College Research Center (CCRC) at Columbia University, offers lessons to date about the Student Achievement Initiative (SAI), a policy adopted by the Washington State Board for Community and Technical Colleges that draws on intermediate measures of student progress to reward colleges for improvements in student achievement. The policy brief examines policy choices that Washington faced in designing and implementing SAI, the choices that leaders in other states will confront when considering adopting performance incentive policies as a means to improve student outcomes. Funded by the Bill and Melinda Gates Foundation, the three-year evaluation will include an examination of the impact of SAI on college efforts to improve student outcomes and on student outcomes. 

It Could Happen: Unleashing the Potential of California's Community Colleges to Help Students Succeed and California Thrive
February, 2008
(click here for foldout insert)
This report integrates our work over the last year on how to increase student success. It proposes a specific agenda for policy change that could lead to significant and lasting increases in student success.

Invest in Success: How Finance Policy Can Increase Student Success at California's Community Colleges
October, 2007
(click here for Executive Summary)
This report analyzes the degree to which state finance policies for the community colleges align with state priorities - such as access, completion and affordability. It concludes that there is considerable misalignment; therefore, funds are not invested as well as they might be to accomplish state goals. Alternative approaches to finance are explored, and a new approach is suggested to replace traditional (and ineffective) performance funding with "investing in success."

Buying the Right Thing: Using a Policy Audit to Align Community College Finance with State Policy Goals, April-June, 2007
This article, co-authored with Steve Boilard of the Legislative Analyst's Office, was published in the April-June 2007 issue of Planning for Higher Education (vol. 35, no. 3). It summarizes the results of a policy audit of California's finance policies for community colleges.

Rules of the Game: How State Policy Creates Barriers to Degree Completion and Impedes Student Success in the California Community Colleges, February 2007
This report finds low completion rates among degree-seeking students and identifies several areas of state policy that inadvertently create barriers to student success. It offers general recommendations for how changes to state policy in these areas can increase student success.

Shared Solutions: A Framework for Discussing California Higher Education Finance, June 2005
This report proposes a new framework for understanding California's challenge to finance higher education for its residents over the next decade. The report presents alternative enrollment scenarios, estimates the cost of each scenario, and analyzes the prospects of meeting the cost through (1) state appropriations, (2) student fee revenues and (3) efficiency gains

Funding Adult Education: Does California Put the Money Where the Needs Are?, January 2004
This report examines the investment of adult education funds across the state's 58 counties in relation to the need for adult education services in each county.

Using a Policy Audit to Align Community College Finance with State Policy Goals
Presentation to the Making Opportunity Affordable (MOA) Academy, June 3, 2008

Financing Community Colleges: Policies, Incentives and Language Matter
Presentation to the Achieving the Dream State Policy Meeting,
February 5, 2008

Financing Community Colleges: Policies and Incentives Matter. Presentation to the Association for the Study of Higher Education, November 7, 2007

Buying the Right Thing: Using a Policy Audit to Align Community College Finance with State Policy Goals
Presentation to the Association for the Study of Higher Education, November 2, 2006

Shared Solutions: A Framework for Discussing California Higher Education Finance
Presentation to the Association for the Study of Higher Education, November 16, 2005

Meeting California's Higher Education Needs: Challenges and Prospects
Presentation to the Campaign for College Opportunity, August 8, 2005

Highlights of Institute's Reports, (1) Variations on a Theme and (2) Shared Solutions
Testimony to the Assembly Higher Education Committee, June 22, 2005

Suggestions for Addressing California's Higher Education Challenges
Testimony to the Assembly Higher Education Committee, March 1, 2005

Funding Adult Education: Does California Put the Money Where the Needs Are?
Presentation to the Assembly Select Committee on Adult Education, February 25, 2004

State Financing of Higher Education: Policy Implications
Presentation to the Community College Leadership Development Initiatives (CCLDI), February 13, 2004