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There are increased efforts by our administration to enhance student progress and to improve completion rate by rewarding higher education institutions with performance based funding or PBF. Making this a mandatory accountability tool, this program is already under way in 35 states and policies are being developed towards making this program sustainable.

However, if you deeply analyse the implications of this program, there are many unintended and troubling impacts that have not been factored in. For example, colleges that depend solely on resources may limit admission to students who are more likely to graduate. This will hugely impact the disadvantaged groups that are not likely to graduate.

Colleges that serve students from disadvantaged backgrounds will suffer from disproportionate penalization and this is a huge concern that must be addressed. In at least 50 community colleges, the state of Texas has adopted the PBF program. Based on intermediate performance student achievement metrics, colleges in this state are awarded funding.

Performance metrics taken into account include completion of 15 to 30 credit hours, passing gatekeeper courses at college level and developmental coursework completion. Key milestones taken into account include four year transfer and earning an associate degree or certificate degree.

For every success point achieved by a student, colleges are at present awarded $185. The legislature has proposed raise of the current 10% funding towards PBF program to 25%.  Studies show that as compared to their peers, students who are assigned to a very low developmental education level, those with a GED, part time students, older adults and African-American students were unable to procure a higher percentage of PBF for their colleges.

It goes without saying that colleges are not going to take the trouble enrolling students who are not poised to attract funds to the institution. As compared to four year institutions, open access community colleges cannot easily restrict admissions.

This is not however impossible. For example, community colleges can restrict number of courses in adult basic education and developmental education and can also restrict enrolment of disadvantaged students through reduced recruitment efforts at high schools.

This kind of behaviour by institutions is a looming threat in the face of full-fledged implementation of the PBF program. If student outcomes are a criteria for Texas state funding, then cash strapped institutions could compromise on fair recruitment. Fewer institutional resources mean fewer means for community colleges to help disadvantaged students and this could soon turn into a vicious cycle.

PBF could quickly place community college leaders in a delicate situation. Negative financial consequences may result from open access. Community colleges predominantly depend on state funding. The funding model is based on certain milestones. If the colleges do not achieve that milestone, this may block the necessary pathway to postsecondary education which the community colleges were always known for.

There is no doubt that there is a strong potential to bring about positive changes if the PBF model is implemented in the right manner based on the right formula. However, if not well-designed, this model could be hugely detrimental to the overall growth of our higher education. Unintended consequences could result from PBF and policy makers must necessarily keep in mind the long term implications.