Florida’s University Performance-Based Funding Program Should Reward Economic Mobility

This post was last updated on December 8, 2021. As new policies are announced, FPI will update this page.

As Florida’s response to COVID-19 takes front and center, concern grows for low-income families who struggle to take precautions against the spread of the virus. Although Congress has passed the Families First Coronavirus Response Act to address, at least in part,  the public health crisis and economic fallout from COVID-19, many barriers continue to keep struggling families from accessing the assistance they need during the pandemic. As Florida initiates policies implementing the Act and addressing other barriers to the safety net, FPI will update this form. When available, hyperlinks are provided to agency documents or statements that provide greater detail  about the new policy.

On March 22, 2020, FPI and 44 other organizations sent a letter to Governor DeSantis, leadership in the Legislature and agency heads to urge action on 47 specific policy changes to reduce unnecessary barriers for Florida’s safety net programs in response to the COVID-19 pandemic. See the letter here.

Higher education is often considered to be “the great equalizer," and in Florida, the state's university system has a track record of lifting students to economic and professional success. While the benefits of higher education are often intangible, families and policymakers alike search for how to measure the impact of different institutions on postsecondary success and income. Floridians all have a stake in the value and quality of the state’s public institutions of higher learning — because while the benefits of degree attainment manifest in higher future wages for individual students, they also manifest in a broader economic impact felt by communities. The value of Florida’s higher education system diminishes when some students are left behind, yet the metrics used to measure university performance fall short by not measuring long-term economic outcomes for students with low incomes.

For nearly a decade, the Legislature and Florida Board of Governors have leaned on a formula to measure “performance” and incentivize universities that do well — as far as the formula is concerned. Yet, none of the state formula’s metrics accurately measure one of the hallmarks of a quality higher education: economic mobility. A leading economist’s study reveals that some of the universities considered “lowest-performing” according to the state’s current Performance Based Funding (PBF) formula are high performing when it comes to economic mobility. Every day, Florida postsecondary institutions that serve high proportions of students of color provide an outsize chance of achieving income mobility and building generational wealth, and they do so without being recognized by the very system that dictates their funding. State lawmakers and the Board of Governors should reevaluate not only the PBF’s metrics, but also its goals and purpose.

Florida’s Performance-Based Funding for Universities       

Since its 2014 reintroduction, Florida’s PBF program has consumed an increasing share of the state’s university funding allocations, ballooning to $560 million in fiscal year 2021-22. This reflects state leaders’ increased emphasis on “performance” metrics.

Currently, 29 states have some form of performance-based funding in place to evaluate university success. As FPI has previously noted, the outcomes of performance-based funding in other implementing states have been mixed at best: “Institutions with more resources to begin with tend to outpace others with fewer resources, perpetuating funding inequities. Schools that serve more low-income students and students of color often lose out in these funding schemes.”

Under the current PBF system, all public universities are evaluated on the basis of post-graduation outcomes, affordability, access, the four-year graduation rate, student GPA and retention, and student degrees in areas of strategic emphasis, such as STEM, health, and education. Other metrics vary depending on the university; so, while the University of Central Florida (UCF) and Florida Gulf Coast University (FGCU) choose to be evaluated on the number of degrees awarded to Black and Latina/o students, the remainder of the university system chooses not to do so.

Florida’s PBF program has disproportionately benefited the University of Florida (UF) and Florida State University (FSU), flagship schools with selective admission policies that result in less diverse student populations than Florida’s other public universities. While the budget for PBF has grown and significantly shaped Florida’s university system, the program has not resulted in institutional diversity on par with the state’s demographic profile. For many college-access advocates in Florida, the question persists: do the standards espoused by PBF truly incentivize institutions to provide a high degree of value to their students with low incomes?

Florida’s PBF program has disproportionately benefited the University of Florida (UF) and Florida State University (FSU), flagship schools with selective admission policies that result in less diverse student populations than Florida’s other public universities.

Economic Mobility Rates Offer a Better Measure of Performance

Raj Chetty, a Harvard economist and Director of Opportunity Insights, utilized data on the earnings outcomes of students alongside their parents’ incomes in order to discern the role that colleges have in intergenerational income mobility in his formative 2017 work, “Mobility Report Cards.” Chetty devised a new metric, “mobility rate,” which measures a college’s share of students from families with low incomes in combination with the share of these students who went on to receive high incomes post-graduation, or “those that offer both high success rates and low-income access.” These universities are not typically Ivy League or public flagship universities and are often not considered “highly selective.” Rather, these colleges and universities support strong outcomes for alumni in terms of employment, pay, etc., without also severely limiting access via stringent admissions standards. As is the case with UF and FSU, restrictive admissions policies often consign flagship state universities to low economic mobility rates.

Chetty calculated the mobility rate of each college and university in Florida, and his results demonstrate a divergence between Florida’s PBF evaluation of universities and the actual economic outcomes achieved by students with low incomes at Florida’s “lowest-ranked” universities. In these mobility rates, Chetty identifies Florida A&M University (FAMU), a Historically Black College or University (HBCU) that has the second-lowest mean PBF score among Florida public universities, as having the second-highest rate of economic mobility amongst public universities in Florida. FAMU was preceded only by Hispanic-Serving Institution (HSI) Florida International University (FIU). Additionally, though not a university, Miami Dade College — another HSI — outranks all other public colleges and universities in Florida for mobility rate, except for FIU.

Given this context — that HSIs and HBCUs like FIU, FAMU and Miami Dade College offer high success rates in terms of upward mobility — the Legislature and Board of Governors should reconsider its metrics for university “performance” to reflect the long-term economic value of the state’s institutions of higher learning for all Floridians, not just the wealthiest.

This blog was synthesized from research authored by Alex Anacki as part of his honors college thesis at Florida International University in April 2021.

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