Michigan

In this report, we examined five kinds of equity-focused metrics in state OBF policies to determine the extent to which states prioritize the enrollment and success of students of color and students from low-income backgrounds:

  1. Enrollment metrics for students of color
  2. Success metrics for students of color
  3. Enrollment metrics for students from low-income backgrounds
  4. Success metrics for students from low-income backgrounds
  5. Metrics related to campus racial climate

While the inclusion of these metrics in policies is essential, how they are deployed is equally as important. Therefore, we also considered whether the metrics were mandatory, optional, or weighted. Weighted metrics are the most ideal. These are mandatory and are given additional value, so strong institutional performance on a weighted metric would garner greater advantage or funding.

Two-Year Institutions

Michigan adopted outcomes-based funding for community colleges in 2005. It is allocated as base funding annually.

The metrics include:

  1. 30% on across-the-board adjustment: Funding is distributed based on the college’s individual base amount percentage in proportion to overall funding from the prior fiscal year.
  2. 30% on contact hour equated students (CHES): Funding is distributed based on the number of CHES per college. Students in health and technology programs receive increased weighting under the calculation for this category to account for higher instructional costs.
  3. 10% on performance completion improvement: Funding is awarded based on the improvement in completions (degrees, certificates, or transfers to a four-year college) over a six-year period. Colleges that demonstrate greater improvement receive a slight funding increase, based on 20% of the category’s funding.
  4. 10% on performance completion number: Funding is awarded based on the colleges’ share of completions relative to the overall number of completions statewide.
  5. 10% on performance completion rate: Funding is awarded based on six-year completion rates of the 2007 and 2008 student cohorts. Similar to the completion improvement category, 20% of the funding is distributed to colleges that are equal to or above the statewide completion rate average. 80% of the remaining funding in this category is distributed proportionately to all community colleges.
  6. 5% on administrative costs: Colleges that have lower administrative costs are allocated a larger portion of funding in this category.
  7. 5% on local strategic value: Community colleges must meet a minimum number of four out of five best practices in three categories (economic development/business partnerships, educational partnerships, and community services) to receive funding.

The policy does not have a metric that measures campus climate.

The policy is overseen by The Michigan Legislature. To learn more, visit https://www.house.mi.gov/hfa/PDF/CommunityColleges/CColleges_Performance_Indicators_Formula_Memo.pdf.

Two-Year Institutions

Enrollment of Students of Color None
Success of Students of Color None
Enrollment of Students from Low-Income Backgrounds None
Success of Students from Low-Income Backgrounds None
Measure Related to Campus Climate None

Four-Year Institutions

Michigan adopted outcomes-based funding for universities in fiscal year 2012-2013. It is allocated as base funding annually.

The state appropriation for a university’s yearly operations funding includes three pieces: the base, the performance funding increase, and the Indian Tuition Waiver (ITW) funding. The base amount is the university’s appropriation from the prior fiscal year. Performance funding is the increased funding amount added to the base for the new fiscal year. Indian Tuition Waiver funding is the amount of funding appropriated to cover a university’s ITW cost from the previous fiscal year.

The FY 2019-2020 budget allocated half of the funding increase proportionate to FY 2010-2011 appropriations (across-the-board) and based the balance of the funding on six performance metrics. The metrics include:

  1. Undergraduate degree completions in critical skills areas, including:
    • Agriculture, Agricultural Operations, and Related Sciences
    • Architecture and Related Services
    • Biological and Biomedical Sciences
    • Communications Technologies/Technicians and Support Services
    • Computer and Information Sciences and Support Services
    • Construction Trades
    • Engineering
    • Engineering Technologies and Engineering-Related Fields
    • Health Professions and Related Programs
    • Mathematics and Statistics
    • Mechanic and Repair Technologies/Technicians
    • Military Technologies and Applied Sciences
    • Natural Resources and Conservation
    • Physical Sciences
    • Precision Production
    • Science Technologies/Technicians
    • Transportation and Materials Moving
    • Completions are weighted based on the length of time it normally takes to complete the undergraduate degree or certificate. Degrees and certificates are weighted as follows:
      • Bachelor’s degree 1.000
      • Associate degree 0.500
      • Certificates of more than one but less than two academic years 0.375
      • Certificates of less than one academic year 0.125
  2. Research and development expenditures
  3. Six-year graduation rate
  4. Total degree completions
  5. Institutional support expenditures (administrative costs) as a percentage of total core expenditures
  6. Percentage of students receiving Pell Grants

Scores for each of the four Carnegie-based metrics are awarded as follows:

  • 3 points for scoring in the top 20% nationally
  • 2 points for ranking or scoring above the national median
  • 2 points for improving over a three-year period

For the first two components listed, funds are allocated to the universities in direct proportion to the metric. For the remaining four components, each university receives a score based on how its performance compares with that of national public peers, and funds are allocated in proportion to each university’s total score, weighted by the size of the university’s undergraduate enrollment.

The policy does not have a campus climate metric. However, universities are subject to a 10% penalty on operations funding if they fail to certify that they have complied with policy requirements related to sexual assault prevention and Title IX reporting requirement. Additionally, to participate in the OBF policy, institutions must:

  • Comply with tuition restraint requirements under Section 265 of the budget, which includes limiting increases in resident undergraduate tuition and fees for FY 2019-2020 to no more than 4.4% or $587, whichever is greater. (Section 265)
  • Certify that the university participates in reverse transfer agreements with at least three Michigan community colleges. A reverse transfer agreement allows a student who transfers from a community college to a four-year university, and subsequently completes sufficient credits to receive an associate degree, to be awarded that degree by the community college. (Section 265a)
  • Certify that the university’s dual enrollment policy does not consider use of dual enrollment courses toward high school graduation requirements as a consideration for awarding college credit for the courses. (Section 265a)
  • Actively participate in, and submit timely updates to, the Michigan Transfer Network, an online service for students that provides course transfer equivalencies across all public colleges and universities and most independent colleges and universities in the state. (Section 265a)

The policy is overseen by the Michigan Legislature. To learn more, visit https://www.house.mi.gov/hfa/PDF/HigherEducation/HigherEd_Approps_Report_fy2019-20.pdf.

Four-Year Institutions

Enrollment of Students of Color None
Success of Students of Color None
Enrollment of Students From Low-Income Backgrounds Mandatory
Success of Students From Low-Income Backgrounds None
Measure Related to Campus Climate None

Outcomes-Based Funding Map Placeholder
Outcomes-Based Funding Map