Due to budget changes within the Texas State Technical College system, the state’s 12 technical colleges will receive state funding in proportion to the future incomes of their graduates as of September 2015. This is part of a growing trend in which the allocation of state funding to colleges is based upon graduates’ success. While other states have appropriated college funds based on performance factors such as degree completion and graduate career fields, the state of Texas will be the first to directly correlate funding and graduate income. Although this approach to funding may have limited value, it will be detrimental to education if states continue to equate graduates’ success to their salaries.
Texas’ new fund appropriation formula applies only to the state’s technical schools, not the University of Texas system. The system will replace all funding based on enrollment; when the new funding formula is in place, technical colleges will receive 26 cents for every dollar graduates make above the minimum wage. Comparatively, the state of Michigan appropriates college funding based on factors including graduation rates, degree attainment in critical fields, and research and development expenditures.
Although technical colleges focus more directly on employment than more traditional four-year institutions, it’s wrong to punish them by cutting funding because of graduates who don’t make enough money. Doing so doesn’t take into account the value of knowledge attainment and personal growth. Especially if adopted by larger universities, which is unlikely, this policy of heightened emphasis on future income is a dangerous trend that could lead to the neglect of less profitable academic pursuits, like social work, for example.
If Texas sees value in tying funding to future performance, it should distribute funds based on job placement rather than income. Income is affected by a number of uncontrollable variables including career field, surrounding job market, and economic and individual temperament, and thus is an ineffective means of measuring colleges’ efficacy. Income-based funding would encourage schools to cut valuable yet inherently lower-earning programs in education, health care and the humanities. Technical colleges are generally focused on direct employment, so funding based on job placement is a more accurate and effective option for the state.
Texas’ new program is, in some respects, similar to President Barack Obama’s national initiative to tie college performance to student aid. The president’s plan would rate colleges based on access, affordability and “student outcomes,” allocating aid accordingly. Such a system would be preferable to aid based only on graduate income. However, any system of fund allocation based on graduates’ future performance must be careful to foster all kinds of learning and prevent discrimination of any academic programs.