Student equity central to an effective performance funding model
A new report by La Trobe University has found that student equity is central to the effective implementation of university performance funding. Under the model proposed by the Australian Government, universities would receive public funding according to their performance on outputs such as student completions, satisfaction, and outcomes.
The report, funded by the National Centre for Student Equity in Higher Education (NCSEHE), analysed national data on retention, completion, satisfaction and employment, including for non-university providers. Performance funding models in the US and UK were also examined.
Lead report author Associate Professor Andrew Harvey, from the Centre for Higher Education Equity and Diversity Research (CHEEDR) at La Trobe University, said that student equity is at risk when governments measure only outputs rather than performance.
“Many outputs simply reflect student inputs so we need to identify the value added by each institution. If outputs alone are valued, then many institutions will simply increase the selectivity of their admissions, reducing social mobility. Our current metrics are insufficient to measure institutional performance and are riven by paradox,” Associate Professor Harvey said.
“Institutions that do well on graduate employment often perform badly on success and retention. Student satisfaction is not positively correlated with success, retention, completion, or strong graduate outcomes.”
In order to be effective, the authors argued that performance funding needs to observe three principles. Firstly, student equity needs to be an explicit objective.
“Student equity is enshrined in Australian policy and legislative objectives, and this commitment should be reflected in any performance funding model. Currently, universities range widely from four per cent low socioeconomic status (SES) participation rates to nearly 40 per cent, suggesting that widening access could itself rightly be seen as a performance objective,” Associate Professor Harvey said.
Secondly, the report advocates the need to reward performance rather than outcomes. This task requires further work to identify the learning gains made by students over the course of their degree, and the university’s specific contribution to graduate outcomes.
Thirdly, the authors argue the need for performance funding models to be student-centred.
“An effective approach would involve including students in the design and assessment of any proposed model,” Associate Professor Harvey said. “An effective model would also provide clear and transparent information that students could easily access and understand, including for non-university providers.”
NCSEHE Director Professor Sue Trinidad noted the importance of integrating student equity within new funding models, consistent with national policy and legislative objectives.
“This research highlights the need to consider student equity as central to any performance funding model, and the need to distinguish performance from outcomes. This would encourage all higher education institutions to value equity across the student life cycle,” Professor Trinidad said.
The research was co-authored by Associate Professor Andrew Harvey and Beni Cakitaki from La Trobe University, and Matt Brett from Deakin University.
The full report, Principles for equity in higher education performance funding, can be accessed here.