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4/18/2013 - Jackson, Miss.

The Board of Trustees of State Institutions of Higher Learning approved a revised allocation model for the university system at their meeting held today in Jackson. The current allocation model, which is the same used since the mid-1990s, has been locked in place since 2009 by language in the university appropriations bill requiring funds to be distributed in the same manner as the previous year. During the 2013 Legislative Session, the Mississippi Legislature removed the restriction, opening the opportunity to implement a performance-based allocation model that distributes funds equitably and rewards universities for operating efficiently and achieving attainment outcomes.

Following a national trend in higher education, the model includes performance measures, such as graduation and retention rates and productivity outcomes. The model also considers the varying costs incurred when teaching individual courses and operating the campus as a whole.

“This allocation model is the product of a very careful and rigorous study designed to understand and evaluate the numerous and varying factors that make each university unique in its financial profile,” said Trustee Alan Perry, Chair of the Finance Committee. “While no model will ever be perfect, and while it is likely that no university will agree with all aspects of the model, we believe that this model produces an overall result that is fair and equitable to all of the universities. Moreover because this new model is based on completed courses, instead of merely enrollment, it provides an incentive for each university to become more effective and efficient.”

The model includes several decision points for consideration by the Board of Trustees, including weights for completed credit hour production, funding for Board priorities, operational support, non-resident weighting and a hold-harmless provision to allow the model to be phased in without creating a sudden change in the funding level of any of the universities.

Understanding that the cost of delivering courses varies depending on the discipline and level of study, the model incorporates a weighting for completed credit hour production. Math, science, engineering and health courses cost more to provide, due primarily to the lab components in these classes; therefore, these courses carry more weight more in the formula. Likewise, upper division and graduate courses are weighted more heavily than lower division courses.

The formula measures the number of credit hours completed at each university. This measure shifts focus from the number of students who enroll to the number of students who successfully complete a course, thus moving one step closer to obtaining a degree. The formula also measures attainment outcomes, which include degrees awarded, the number of students graduating in STEM (Science, Technology, Engineering and Math) fields and how many at-risk students are served by the university. Research has shown that Pell Grant recipients, students with ACT scores of less than 19 and those who are 25 years of age or older have a greater risk than others for not persisting to graduation. Universities must put additional supports in place to break down the barriers to graduation faced by these students. The formula recognizes that additional resources are necessary to help students stay on track to graduation when there are many other demands on their time and attention.

The formula also considers intermediate outcomes, which includes the number of students with an ACT score of less than 19 who complete successfully the first credit-bearing English and Math courses in college. The amount of research activity is considered in the funding model for the research universities. In addition, the number of degrees awarded relative to resources is also considered in the formula.

After considering the base amount needed for operational support, which varies from university to university based on factors such as enrollment, number of on-campus students, number of buildings, acreage, number of off-site facilities and infrastructure, an amount is allocated to each university. Ninety percent of the allocation is determined by the completed credit hour production and 10 percent is determined by progress made on Board priorities, including attainment outcomes, intermediate outcomes, research activity and productivity outcomes after Operational Support, which is taken off the top.

The FY2014 allocation model includes a stop-loss provision to ease the transition between the previous allocation model and the current model. The provision was needed because the previous model was based on outdated enrollment percentages and will be phased out over time. The Legislature also included $3 million in additional funds in the FY2014 appropriation to facilitate the transition to a new funding formula. These hold-harmless funds will make certain no universities receive a funding cut in FY2014 as a result of implementing the new allocation model.

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The Mississippi Board of Trustees of State Institutions of Higher Learning governs the public universities in Mississippi, including Alcorn State University; Delta State University; Jackson State University; Mississippi State University including the Mississippi State University Division of Agriculture, Forestry and Veterinary Medicine; Mississippi University for Women; Mississippi Valley State University; the University of Mississippi including the University of Mississippi Medical Center; and the University of Southern Mississippi.

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