ABOR regent and chair-elect Fred DuVal visited NAU Monday to discuss his agenda for the upcoming term, which starts July 1. Two main topics of interest are a new performance-based funding model and his goal to not raise tuition for students next academic year.
LJ: I was just wondering if you could sum up performance-based funding for the readers.
FD: The way we fund universities currently has three sources. You’ve got the third-party money, you have tuition money and you have the state’s investment. The performance funding proposal has to do with the state’s investment. Historically, for the last 50 years, the state’s investment in higher education has been based on enrollment. It’s called “22 to 1.” Basically, for every 22 students you would get from the state, [you get] a faculty member. It hasn’t been funded in many years. So we’ve grown without state support. So, we’ve looked at that, and we thought maybe it asks the wrong question. Maybe our size isn’t what’s important; maybe our productivity is what’s important. How do we renegotiate with the state a funding formula that has the state invest in our output — our degrees — particularly those degrees that meet the workforce needs of the state?
LJ: How will [performance-based funding] be tailored to Arizona’s public university system?
FD: Well, what we would do is work with the business community and the state policy makers to ask the question: “What are the workforce needs of the Arizona strategic plan over the next five to ten years?” Look at what we’re producing, and then go back to the state and say, in the funding that the state gives us, “why don’t we ramp up those areas of discipline in which we are currently not meeting the workforce needs of the state and we will increase the state’s investment in those degrees so as to incent us to produce more of them.”
LJ: Our schools vary greatly in sizes — NAU is definitely the smallest. You will scale them, right?
FD: No, every dollar of every student has the same value. So, a student in journalism will have a certain dollar level from the state, and that will be true at any of the three universities. So the actual investment is the same regardless of what school a student attends.
LJ: How do you measure a graduating classes economic contribution?
FD: Great question. We spend a lot of time trying to figure that out, and there is no easy answer. Because its easy on one hand to look back — we know that any student with a college degree is going to make more money in their life on average — significantly more — than someone without a degree. We know that across the board. We don’t have the data to track people as the move in their career — particularly as people change careers now eight to nine times in their life — as to what their value is and the extent to which the degree facilitated that value. It is a very, very elusive question and we don’t have an answer to it yet.
LJ: What if you see a high rate of graduates going out-of-state? How do you measure the productivity that way?
FD: We don’t. In the sense that we will measure all degree productivity, rather [than] folks that will stay in-state or not. But it’s a fair question as to whether or not we would put a different dollar value on someone leaving the state or not. That’s certainly an open question.
LJ: Could this system cause schools to make their system easier to increase graduation rates? Why or why not?
FD: It’s an important question — and we hope not. That is a deep concern that what we do not want is grade inflation to meet the new metrics. We’re going to have to come up with some protocols and understandings as to how we protect against that.
LJ: Have there been studies showing this could happen? Has it been used in other states?
FD: Yes, it is being used in a couple other states. But it’s hard to make comparisons because, for example, Indiana has a completely performance-based model. They have not been cut as much as we have — is that because of their funding formula model, or their economy is stronger than ours? It’s impossible to say.
LJ: So, what is the likelihood of performance-based funding coming through?
FD: Nothing will happen this year. It is easy to describe, but it is complicated to negotiate. What’s the value of a masters degree versus a doctoral degree? How do you calculate the cost of a degree? It costs a lot more to train a nurse than it does to train a journalist. We have to factor all of these things in. So, this will be a slow fuse that I think will take a couple years to pass.
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In addition to performance-based funding, DuVal is also proposing to Arizona legislatures a plan to increase state funding so as to promise a $0 tuition raise.
LJ: Now I have a few questions about your $0 tuition increase. How do you propose to make it work?
FD: Our basic proposal for legislature is this: Our tuition has grown 78 percent in the last four years. We had the second highest tuition raise in the United States. And it is because we suffered the largest cuts on a per-student basis in the United States. We’ve got this year somewhere between $350 million to $400 million in additional money because of Prop 100, which was passed based upon education. So we’re saying to the legislature, ‘ you ask the tax payers to tax themselves for education, this year you can afford it.’ We’ve asked Arizona tax payers – their students and families – to pick up the burden of the increased costs over the last four years, now it’s time for the state to step up and take their responsibility. And if they do, we will give Arizona families and students a break and pass the $0 tuition increase.
LJ: What kind of response are you getting?
FD: It’s too early to tell. The session doesn’t start until January and we won’t really know until then.
LJ: Will this lessen the quality of education?
FD: The point is this: we need – in order to keep growing – $50 million to $60 million of new growth this year. Whether this money comes from the state or comes from the students is it less important to us then we have it to move forward in excellence? And so our proposition is that this year – the students and the families have paid the price for the last four years. The state has subtracted. If the state can pick up the cost of growth and excellence this year we can give the families a break. But no one is suggesting we don’t need additional resources. We’re simply suggesting that maybe it’s their turn to step up.
LJ: How does this apply to our Pledge Program here? Will the freshmen next year be paying the same as the freshmen this year?
FD: It’s a great question. I think we will treat the Pledge Program differently because we honor it, it works, it’s a best practice and I think that there’d be a separate conversation about the pledge.
LJ: How do other schools feel about the Pledge Program? Will other schools change over to the program?
FD: There has been discussion about it. I think you’ll find that ASU will move towards it in the coming years. UA is less likely to.
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