The Oregon Higher Education Coordinating Commission voted on Thursday to make key changes to the way state funding is allocated to Oregon’s seven public universities.

This is the first time the commission has made any changes to the funding model — called the Student Success and Completion Model, or SSCM — since it was first implemented in 2015.

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Many of the changes are aiming to simplify or clarify the model. Others are meant to incentivize collaboration and equity, including adding a “bonus” for institutions that graduate Oregon community college transfer students. The HECC also approved increasing an existing bonus for institutions that graduate Oregonians from underrepresented groups.

HECC officials estimate that the changes will lead to modest shifts in funding. According to HECC estimates, the newly formulated SSCM would give Oregon State University about 4% less in the state’s biennium funding, and smaller regional institutions, such as Southern Oregon University and Western Oregon University would receive about 5% more.

These changes come at a time when Oregon colleges and universities have undoubtedly suffered financially during the pandemic — with falling enrollment forcing staff and faculty layoffs at some institutions.

“I think at this point, most if not all of the universities are satisfied with the process and the outcome,” HECC Director Ben Cannon told OPB. “I should be clear though that along the way, this has been, at least at times, very contentious. It involves funding, and they all need funding to sustain or enhance the quality of their activities and to try keep costs down for students.”

At their core, the changes to the funding model are aiming to modernize the formula by updating definitions and data, HECC officials said. That includes updating “cost weights” — basically recognizing that different degree types cost different amounts of money to teach. For instance, large-scale English lecture courses don’t cost the same as a small, hands-on engineering lab.

Cannon with the HECC said those changes do not mean the first iteration of the formula was not working, but rather “I would describe them as recommitting the commission to the principles, the formula, the approach that the commission adopted five or six years ago.”

Before the SSCM was implemented in 2015, funding allocation for the public universities was mostly based on enrollment.

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“The main idea was to align state funding with the goals of the state for learning outcomes, namely degree completion at all levels, and equity,” Cannon said about the adoption of the SSCM. “The change in 2014-15 reflected the state’s commitment to not merely getting students in seats, but seeing them through to the finish line.”

Instead of enrollment numbers, the SSCM now focuses on three funding streams: money for specific services, programs or general operations at universities; funding based on the credit hours completed by Oregon resident students; and outcomes-based funding, tied to completed degrees, with some degrees receiving additional “weight” in funding allocation.

It continues to calculate funding allocations using those same categories, even with the updates.

According to HECC data, the number of degrees awarded to Oregon residents has continued to grow steadily for more than a decade, showing that the SSCM has not had any sort of negative effect on degree completions. Likewise, there has been similar growth in Oregon residents receiving bachelor’s degrees in STEM fields.

“In the main, the formula is working very well, and the adjustments are just that — adjustments, largely technical changes,” Cannon said.

For example, one update to the SSCM is focused on improving equity by increasing the bonus an institution receives for graduating a student from an underrepresented group from 40% to 50% (or from 55% to 60% if the student is from two or more targeted populations).

Those underrepresented groups include people of color, veterans, rural students and low-income students.

“I think the commission feels an even greater sense of urgency for closing degree completion gaps that our underrepresented students continue to experience,” Cannon said. “It’s not a failure of the current formula, but an increased sense of urgency there.”

HECC commissioners Thursday noted that with these changes there is hope that the state may offer more funding in the future to the public universities, to fully showcase how well the model is working.

“If we’re getting better results, we should be putting more funding into the model,” Duncan Wyse with the HECC said during Thursday’s meeting.

The new changes to the SSCM will be applied in the 2021-23 state biennium budget. Currently, Oregon Gov. Kate Brown’s proposed budget offers about $849 million to public universities — the same amount the universities received from the last biennial budget.

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