The funding formula for New Mexico colleges and universities is moving from an enrollment-based system to a performance based system in an effort to create funding incentives to raise graduation and retention rates.
Larry Behrens, the public information officer at the New Mexico Higher Education department, said the new Watson-Hadwiger Formula allocates funds based on outputs rather than inputs. Previously, the formula was based on the number of students enrolled, and the square footage of an institution. Rep. Ray Begaye (D-San Juan) said the new formula will create incentives that specifically target struggling students
“I know from the students coming into the higher education setting, two years or four years, there’s been some indicators that students do drop out, so there’s a greater loss when students drop out of higher ed and complete at other schools,” he said.
“This funding formula fixes it.”
The Daily Lobo reported last month that UNM’s appropriation, $284.6 million for fiscal year 2013, is 5.7 percent more than it received this year. The state’s higher-education allocation for FY 2013 is $749.3 million, a 5.4 percent increase from this year. Of the total higher-education budget, $29 million was allocated for the new formula.
Behrens said the outputs portion of the new formula makes up 5 percent of total funding to universities, and is aimed at increasing performance rather than focusing on inputs.
“This 5 percent may not seem like a lot, but it’s one of the more aggressive in the country while still being prudent. Developing a formula that rewards institutions for graduates is a ‘win-win-win’ situation,” he said.
Behrens said the old formula required institutions to calculate inputs through 125 spread sheets. The Watson-Hadwiger Formula only requires seven.
According to Behrens, the new formula, which came out in October 2011 and will affect FY 2013, helps achieve three goals:
1. Close the achievement gap between the highest and lowest achieving students by increasing incentives for Universities to improve graduation, retention and course pass rates.
2. Graduate more students in the STHEM (science, technology, health care, engineering and math) fields.
3. Graduate more students overall.
Behrens ascribed four benefits to the Watson-Hadwiger Formula:
1. “The formula determines the best way to prepare our students for the workforce they will face,” by focusing on STHEM fields.
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2. “Institutions receive increased funding for their graduates.”
3. “New Mexico taxpayers and employers receive a better return on their investment.”
4. “Students get a degree which makes them more competitive in the employment market.”
