Montana is only one of 18 states in the US that has implemented Performance Based Funding (PBF) in both its four-year and two-year colleges. Six states fund their two-year colleges using PBF and six others fund their four-year colleges using a similar funding source. Four states are currently transitioning to some type of PBF, while the remaining 16 and DC have not yet signed on to this method of funding.

In Montana for AY 2014-2015, PBF accounts for 5% of current state funding and was tied to degrees awarded and retention numbers compared with previous years. Next year it may increase to 10% and will be allocated differently depending on institution type.

The new proposal would mean doctoral institutions will earn allocations through undergraduate degrees and certificates awarded, retention, graduate degrees awarded, and research expenditures.

Small, regional, four-year colleges will earn allocations through undergraduate degrees and certificates awarded and retention.

Two-year colleges will earn allocations through undergraduate degrees and certificates, retention, and two of the following metrics: Transfer to MUS 4-year school; Success in Developmental Education; Momentum Points (credit accumulation); Licensure/National Exam Pass Rates. Schools get to choose which two metrics to use.

Two-year schools serve a unique population (underprepared, nontraditional, first generation, etc.) and generally the attitude is positive toward having some choice in the metrics used to evaluate progress. Additionally, unlike the current year funding, in subsequent years, schools that do not meet the required success measure at 100% will still receive a percentage of the PBF allocation rather than losing the entire amount. This is important because no one has yet figured out how to do more—and to a better degree—with less funding.

Faculty members’ attitudes seem to be mixed, with some skeptical, some wary, and many very concerned about standards and quality being sacrificed for funding. This is all happening at a time of an improving economy and falling enrollment numbers. Montana State University-Billings announced on Tuesday, February 10, 2015 that it will be cutting two degrees, the tennis team, and eliminating 40 full time positions, to deal with a 4.4 million budget deficit (Billings Gazette http://billingsgazette.com/news/local/msub-announces-budget-cuts-that-include-layoffs-eliminating-tennis-program/article_e1c940a3-377c-5f09-a0b2-3727bac85361.html#utm_source=billingsgazette&utm_campaign=hot-topics-2&utm_medium=direct).

Some people question why, when No Child Left Behind proved to be ineffective (and potentially damaging), the same formula is being applied to higher education. The answer to that question is elusive, and for now, PBF is here to stay in Montana.