Should Graduation Rates Determine Funding for State Colleges?

Barry Lenson

Should Graduation Rates Determine Funding for State Colleges?

“Governors Call for Linking University Financing to Performance,” an article by Amanda J. Crawford on, reports that the National Governors Association just recommended that states begin to use specific performance criteria, such as the number of degrees granted per $100,000 of funding, to set higher-education policy and funding.

The article quotes Washington Governor Christine Gregoire, who said in a keynote address at the organization’s convention, “Education is absolutely key in putting America back to work . . . one of the most important things we need to consider as governors.”

Granted, states need a way to measure the return that they are getting from the dollars that they spend on education. But should that benchmark be the number of graduates?

There are problems with using that as a yardstick because:

  • The main purpose of many community and state colleges is to train students for specific job openings, via short-term courses of instruction. For those colleges, racking up impressive numbers of graduates is really beside the point.
  • Many students who do not graduate from state schools enjoy substantial benefits from attending them anyway.  Think of the young entrepreneurs who launch businesses, many without sticking around colleges long enough to earn degrees.
  • Other factors, such as quality of life, happiness, and community involvement are also important criteria. A young entrepreneur who starts a company and hires a number of employees, for example, is clearly “paying back” the costs of an education to his or her state. Yet that person will fall through the cracks and not be measured according to the criteria that the governors are proposing.

So what is the solution, if not to use graduation rates as a determinant of state funding? Part of the answer may be to realize that the benefits of education are very real, very worthwhile – and impossible to measure in traditional ways.

Learning is good. Learning is important. Learning contributes to the quality of life, and the stability, of a region. Perhaps that is all that governors should really be thinking about – as they once did - even in these dollar-strapped times.

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