Financing Evidence-Based College Completion Programs

By: Angelica Gutierrez with special thanks to Jhenai Chandler of TICAS, Katie Beal and Alex Mayer at MDRC for their contributions.

While there has been a substantial increase in college attainment and college completion over the last two decades, the percentage of students who receive a college degree has been largely stagnant nationwide, with the national six-year college completion rate stalled at 62 percent. The pandemic has exacerbated these trends. Nationally, over 40 million students have some college, no degree, which increased by over a million students in just one year. Large racial gaps in completion persist.

Now more than ever, comprehensive approaches to student success (CASS) programs are critical for students of color and those from lower socioeconomic groups. These programs provide advising, coaching, and/or case management. Through CASS programs students have customized support, usually accompanied by financial help through tuition waivers, or scholarships. These approaches have been shown, through rigorous evaluation, to substantially improve student success.

However, these intensive supports are only available to a fraction of public two-year college students and funding these evidence-based programs can often be challenging. Higher education financial leaders are often at the forefront of triaging finances at their institutions. But open access public colleges, especially two-year colleges, exhibit greater tuition restraint than other institutions; consequently, their financial leaders must make challenging financial choices.1

How Do Colleges Make Funding Decisions for College Completion Efforts?

In Spring 2023, MDRC and The Institute for College Access & Success (TICAS) facilitated a virtual roundtable with a small group of Chief Financial and Student Affairs Officers from three public two-year institutions and systems that serve high proportions of Pell Grant recipients, communities impacted by poverty, and/or students of color. MDRC and TICAS sought to achieve the following:

• Learn more about the ways college Chief Financial Officers (CFOs) make financial decisions about which student success programs or interventions to adopt;
• Develop a deeper understanding of how state postsecondary funding levels factor into financial decision-making of institutions across institutional types and regions; and
• Identify the types of support institutional finance administrators welcome and need to adopt new college completion interventions.

This blog shares insights that emerged from the roundtable, especially about what resources and strategies would better support college leaders and policymakers seeking to scale proven student success initiatives.

Highlights:

There is no ‘one-size fits all’ approach to funding college completion programs, all of which often rely on a combination of funding from philanthropic grants, state, and local institutional dollars. Throughout the roundtable, participants primarily indicated fluctuations in state funding allocations limit college leaders’ ability to plan, implement, and sustain college completion programs or services. In addition to this state funding structural challenge, participants surfaced four additional factors that influence financial decision-making.

1. Timely Collaboration Between Finance and Student Affairs: Some systems found it beneficial to have finance staff or budget managers embedded on campuses to maintain consistent communication and collaboration with student affairs practitioners. This positioned finance staff to understand elements of college completion programming and better champion their value proposition. However, this level of cross-collaboration is atypical for many systems. Several participants indicated that CFOs and finance staff are included in student affairs financial discussions late in the decision-making process for compliance review, after student success administrators have developed their plans and budgets.
2. Implications of Inequitable Funding Sources: Similar to K-12 funding, some states fund community colleges partly with local property taxes. For two systems represented at the roundtable, the majority of their operating budgets come from levying local property taxes, which creates equity gaps based on income and home value levels. This state funding model may adequately fund institutions in areas with a large property tax base but not for communities in lower-income areas. One institution shared their state funding allocation only makes up about 20 percent of their current operating budget. Many two-year institutions or community colleges are funded based on prior year enrollment. With this particular funding structure, an institution that experiences enrollment declines must immediately pay back any financial differences. More states are exploring new outcomes-based funding formulas, which largely awards funds to colleges based on student success outcomes, and in some cases, awards additional funding for outcomes achieved by historically marginalized populations.
3. Lack of Data Analytics Capacity and Available Data: A challenge some institutions face is the capacity to collect data at the campus level. Often, finance staff want proof that college completion programs and student success initiatives are leading to increases in enrollment or retention. Unfortunately, the student success staff do not always have the capacity, skills or resources to collect the data and showcase emerging trends on their own.
4. Articulating the Return on Investment: Participants shared that their institutions are increasingly interested in understanding the financial return on investment of different student success interventions and using that data to inform funding decisions. They noted that tools like MDRC’s Intervention ROI Tool are useful for providing data on the costs and revenues associated with interventions that they would be unable to collect on their own due to time and resource constraints. The tool can be used by colleges to make decisions about which student success interventions to adopt and to identify how much funding is needed to implement them.

Recommendations to Fund College Completion Programs

Implementing and sustaining evidence-based college completion programs are necessary to move the needle on student success outcomes for students of diverse backgrounds and communities. Stronger and more coherent financial decision-making processes can help ensure institutions are able to intentionally invest in effective completion strategies. We recommend higher education and policy leaders support the funding of new college completion interventions with the following recommendations:

• Create structured opportunities for college and system finance and student affairs officers to collaborate throughout the year and proactively plan for investments in completion programs well before budgets are due. This allows finance staff to understand the nuance of college completion challenges and solutions, while also informing student affairs leaders on the landscape of funding challenges and opportunities.
• Examine how colleges are accessing multiple funding streams and engage finance officers early to identify ways to knit grants, local, state and federal funding sources to fill equity gaps due to limited resources and state funding.
• Institutions should consider both the costs and revenues associated with implementing student success strategies. Resources like the ROI tool help institutions streamline the process of getting information on costs and revenues and identifying gaps in funding.
• Invest in institution and state data systems and analytical use to fund and sustain effective programs. This can also be achieved through partnerships with researchers and non-profit technical assistance providers who can fill data capacity gaps.

Our roundtable discussion highlighted the importance of knitting together multiple funding sources and communicating the value of college completion programs to internal and external stakeholders. To achieve effective collaboration and create mutual understanding of the value of college completion, institutional finance and student affairs leaders should co-create financial goals and decisions that are evidence-based, measurable, and sustainable.