The Iowa Board of Regents may be changing how it awards the appropriations set aside for Iowa universities. Last April, a task force was created to look into the possibility of implementing a performance-based funding system for the state of Iowa and its regent schools. Currently, the three universities that receive state appropriations are funded based roughly on the number of students they enroll. 

Since the system of appropriations comes from taxpayer dollars, it makes sense that Iowans would like to make sure that their money is going to the schools which are providing the best services. With plenty of time left before a decision is to be made regarding a possible implementation of performance-based funding, the board has time to make sure this seemingly simple reform is done right. Not only that, but the board has plenty of time to make sure any possible changes to appropriations are made with the right reasoning in mind.

For example, there is a pervading problem in Iowa and around the country of large amounts of student debt. Reasons for such a change abound, but increasing tuition costs are certainly having an effect. To combat this, Iowa and several other states have implemented tuition freezes, which keeps the cost of attending a regent university at a fixed amount, with increased funding coming from state sources.

According to Janice Friedel, associate professor of education at Iowa State who recently spoke at the Board of Regents’ office, “Performance-based funding is not a solution to the issue of insufficient state support for our higher education institutions. It cannot fill that budget gap.”

This would mean that although a modified funding system may ensure our money is awarded proportionately to those that would use it best, it is not a quick fix to reduce higher education spending.

Similarly, Friedel cautions that, as of yet, there is no research that concludes performance-based appropriations increase graduation rates, another timeless goal of education reform. This lack of direct connection comes despite the fact that there have been at least some form of performance funding programs in place since 1979.

Even though changing the level of funding a state university receives may not fix the problems of state educational spending (and its hand-in-hand partner of student debt) or definitively increase graduation rates, the idea is not without merit.

We should never be afraid to reward those who do their job best, especially when their job is to provide a valuable, affordable education to the masses. With an issue like education, though, it is important that we do not reward some at the expense of those less apt. 

This is what would happen if, for instance, our state adopted a policy where a set amount of university funding would be awarded to our three regent schools based entirely upon their performance. Such a system would lead to a competition between schools for the same money 

While any first-year economics student could tell you that competition is the foundation of a healthy market, there are potential drawbacks to creating an atmosphere of schools competing against one another through standardized metrics 

For instance, if the rate of students graduating within four years is used to award funding, schools have an incentive to push students toward pursuing a single degree with no additional majors. They also have an incentive to reduce the difficulty of their curriculums, to ensure that more students stay enrolled and graduate sooner.

These types of problems can be avoided by careful and thoughtful planning, though. The Board of Regents has an opportunity to make a good change for Iowa’s universities, but only time will tell if they will succeed.