England ‘should learn’ from US troubles with performance funding

England should take heed of the potential detrimental impact that performance-related funding and for-profit higher education has had on widening participation in the US, according to a new study.

A working paper comparing access policies in the two countries, published by the UCL Institute of Education’s Centre for Global Higher Education, cites US research that found performance-related funding can have “unintended” consequences, such as restrictions in admissions to university and weakening of academic standards.

More than 30 states in the US allocate a portion of funding for public universities based on outcomes metrics such as retention rates and number of degrees awarded.

A paper on performance funding in Indiana, Ohio and Tennessee published last year found that university leaders in the states “frequently note that – to improve their graduation performance – their institutions could and often actually do move to reduce degree requirements or to restrict admission of less-prepared students who will be less likely to graduate or perform well”, according to the CGHE study.

The report, “English and American higher education access and completion policy regimes: similarities, differences, and possible lessons”, notes that it will be particularly important for England to “carefully track” the impact of financially rewarding universities for student completion as it continues the development of the teaching excellence framework.

A recent Times Higher Education analysis of the first TEF results, which take into account retention rates, found that some universities may have benefited from having a more advantaged student cohort.

The CGHE research, which was conducted by Kevin Dougherty, professor of higher education and education policy at Columbia University’s Teachers College, and Claire Callender, professor of higher education policy at Birkbeck, University of London and deputy director of CGHE, also advises England to pay “very careful attention” to possible negative repercussions from the large-scale expansion of for-profit higher education in the US.

The UK government has called for an expansion of alternative providers of higher education, including for-profits.

The study states that for-profit enrolments surged in the US between 1980 and 2010 but, since then, support for the sector “ebbed sharply…as it became clear that large numbers of students are failing to graduate or are doing so with large debt and few prospects to be able to pay off that debt”.

“There may be lessons to be learned from the regulatory structure that the US has had to develop to reconcile government provision of financial aid to students attending for-profit colleges and the dangers of poor quality provision by those institutions,” it states.

However, it notes that the Trump administration has announced that it will revoke two regulations, which held for-profit universities accountable when they produced graduates with burdensome student loan debt and would have clarified how student borrowers could have their loans forgiven if they were defrauded and misled by their college. 

The study also suggests that the US could benefit from following England when it comes to the use of income-contingent loans and access agreements to govern the outreach efforts of its universities.   

ellie.bothwell@timeshighereducation.com