As enrollment falls, Arkansas community colleges' funding at risk

Students are seen in the Becky Paneitz Student Center at Northwest Arkansas Community College in Bentonville in this 2017 file photo. (Northwest Arkansas Democrat-Gazette file photo)
Students are seen in the Becky Paneitz Student Center at Northwest Arkansas Community College in Bentonville in this 2017 file photo. (Northwest Arkansas Democrat-Gazette file photo)

Declining enrollment at community colleges has led at least two two-year schools to submit improvement plans to the state's Department of Higher Education.

Northwest Arkansas Community College -- the state's largest public community college -- and the University of Arkansas Community College at Rich Mountain fell below the minimum score in performance-based funding.

But it is too early to say whether the drop will have consequences.

Bentonville-based Northwest Arkansas Community College scored 2.65 points out of the maximum 10, while Rich Mountain scored just below the minimum-performance score of six points at 5.93. East Arkansas Community College in Forrest City scored 4.82 points but recently changed its database reporting system and will resubmit its numbers to the Higher Education Department.

The scores are based on mandatory measures, which can give a community college up to six points, and regional or "mission" measures that can give a two-year school up to four points. The mandatory measures are based on credentials -- from certificates of proficiency to associate degrees -- progression to graduation and course completion.

Normally, falling below the minimum score means a college or university -- no universities did this year -- could lose a portion of its funding from the state. The schools must submit an improvement plan, including a budget dedicated solely to fixing its deficiencies, to the Higher Education Department.

A committee of Higher Education Department staff and college and university leaders would then determine if all or a part of the funding should remain in the hands of the underperforming institution. If the plan is insufficient or if the institution falls below the minimum score for a second consecutive year, it loses the funding.

Colleges and universities get their funding mostly from three sources: student tuition and fees, state appropriations and private donations. For years, the state funded its public higher education institutions based largely on enrollment.

In 2011, state legislators introduced an additional way to fund its public colleges and universities: by performance. Originally, the performance-based funding would have increased 5 percent each year until it reached 25 percent.

But that amount was capped at 10 percent until all public higher-education institutions are funded at 75 percent on the need-based formula, which is based on enrollment figures.

For community colleges, the Higher Education Department takes the most recent five-year average of the metrics and compares it with the most recent three-year average of the same metrics. If a college's three-year average is higher than the five-year average, it is performing well.

The further a college or university falls from the minimum score of six, the more the Higher Education Department can subtract from the 10 percent.

Because Rich Mountain fell short by 0.07 points, it would stand to lose 1.2 percent of the 10 percent. For Northwest Arkansas Community College, which fell lower, the amount of funds possibly lost is higher, at 55.8 percent of the 10 percent -- or about $593,000.

This is the fifth year the Higher Education Department has measured colleges and universities on performance. And it's the last.

Starting July 1, 2018, the state will fund the higher education institutions only on "productivity," which is measured by student success. Because of the change in funding methods, the colleges and universities will not lose the amount slated by the performance-based funding, said Tara Smith, the department's deputy director.

The department will use the performance-based funds to make recommendations for the new productivity funding in fiscal 2018, Smith said.

"Now, ultimately, they could lose money based on productivity funding, but it would be based on a different model than this one," Smith said, adding that the community colleges need not worry because the productivity funding method will take into account a four-year average, which is more in line with what the two-year schools look like today. "That's not where we've seen the huge drops. Five, six years, those are the huge drops. [The new model] is catching them at a point where their enrollment is not so volatile."

Enrollment at community colleges is usually tied to the economy: When the economy is doing well, fewer people enroll at the two-year schools, and vice versa, higher education leaders have said.

The new funding method is about productivity, not performance, Smith said.

"So, it's not like a report card necessarily," she said. "It's not this one score you're trying to get. ... So this is the crude basics of it: The money follows the student, and if the student isn't there, completing successfully, then the money isn't going to go to the institution."

To measure performance, the Higher Education Department took the five-year average starting with fall 2011 and ending in spring 2016. The three-year average is from fall 2013 to spring 2016.

Nine of the 22 public community colleges had a score of 10, including the University of Arkansas-Pulaski Technical College, which once was the largest two-year school in the state before its enrollment dropped nearly 45 percent over the past five years.

Smith said the timing of the three- and five-year averages also has an effect, especially if the new year's enrollment and credentials are much larger or smaller than the one it replaces.

Northwest Arkansas Community College saw a decrease in enrollment for the year it added: It had 7,744 students in fall 2015, a 5 percent drop from the previous fall.

"The metrics of this performance funding structure rely heavily on year-to-year raw number of degrees and certificates awarded," college President Evelyn Jorgenson said. "When our enrollment began to decline in fall 2012, we knew there would be a corresponding decline in degrees and certificates awarded to follow, and that is exactly what happened. Fewer students enrolling eventually means fewer degrees and certificates awarded."

The college peaked in enrollment in fall 2011 with 8,528 students, and it set record numbers of credentials awarded in the 2012-13 school year, in the height of the recession, Jorgenson said. The 2012-13 school year fell out of the three-year average but remained in the five-year average, she said.

The college is starting to put together its improvement plan but "will certainly focus" on student-success initiatives, she said, adding that the college has begun "wraparound services," including a one-stop shop enrollment support center that is designed to support students from enrollment to earning a credential.

"We are also considering ramping up our degree audit efforts to better identify students who might be eligible for degrees and/or certificates that they may not have officially applied for," Jorgenson said.

Rich Mountain did not improve in its students progressing toward graduation, nor in its remedial students completing courses, Higher Education Department data show. The Mena college did see improvements in nonremedial students completing courses and credentials awarded.

It marked the first time the college has not scored a 10, said its chancellor, Phillip Wilson. Decreases in enrollment, coupled with the state's push a few years ago to award certificates as credentials, led to a data set with peaks and valleys for the school, he said, "which is not a good thing with respect to the current formula."

Smith said she expected the college's improvement plan to focus on retention efforts.

East Arkansas will have an opportunity to resubmit its data to the Higher Education Department, which will then run another report based on the new figures. The college switched student information and enterprise systems from one called POISE to another called Jenzabar, said Lindsay Midkiff, the school's director of public relations and marketing.

"We are still evaluating how the changeover in systems may have influenced our report," she said. "We are currently re-verifying previously submitted data, and will then submit any updated data to the Arkansas Department of Higher Education."

POISE is very unsophisticated, said Alisha Lewis, Higher Education Department associate director of communications.

"So whenever they are going from POISE to something that is more sophisticated, that's where some things get lost in translation," she said. "I mean, it's the same thing if you're using an old version of [Microsoft] Word. Sometimes you lose some formatting."

Metro on 05/08/2017

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