Tennessee

Tennessee adopted outcomes-based funding for two-year and four-year institutions in 2010. It is allocated as bonus funding annually.

The Complete College Tennessee Act of 2010 includes a provision for an outcomes-based funding formula model. The Tennessee Higher Education Commission (THEC), in conjunction with systems, campuses, and state government representatives, developed the model.

The metrics for two-year institutions include:

• Students accumulating 12, 24, and 36 credit hours
• Dual enrollment
• Associate degrees awarded
• Certificates awarded
• Job placements
• Transfers out with 12 credit hours
• Workforce training
• Awards per 100 FTE

Four-year institutions are awarded funding based on seven metrics:

• Students accumulating 30 credit hours
• Students accumulating 60 credit hours
• Students accumulating 90 credit hours
• Bachelor’s and associate degrees
• Master’s/Ed. specialist degrees
• Doctoral/Law degrees
• Research, service, and sponsored programs
• Six-year graduation rate
• Degrees per 100 FTE

Tennessee provides premiums to all institutions for the outcomes of two “focus populations”: adult students and students from low-income backgrounds. Two-year institutions also receive a premium for the outcomes of academically underprepared students.

The Tennessee Higher Education Commission’s Quality Assurance Funding program (QAF) — formerly named Performance Funding Program — has been in operation for more than 30 years. All public universities and community colleges can earn additional funds (up to 5.45% of the institution’s state funding) on the basis of quality improvement as measured by a common set of indicators.

This incentive has encouraged institutions to build comprehensive evaluation systems whereby they can reliably measure student learning. The Quality Assurance Funding program serves as an accountability instrument for each five-year master plan and tracks measures the commission is statutorily required to report annually to the Tennessee General Assembly.

The metrics include:

• Academic Programs
  • When an appropriate accrediting agency is not available, institutions utilize program evaluations, self-study and external review processes to assess strengths and weaknesses and ensure that academic program standards remain high.
• Institutional Satisfaction Study
  • Community colleges and universities will follow a unique schedule to engage various institutional stakeholders. Colleges and universities will use widely respected surveys, employed at institutions across the country, to determine institutional satisfaction among students, faculty, and staff on campuses.
• Adult Learner Success
  • QAF implemented the Adult Learner Success standard, which focuses on the unique experiences and challenges facing adult students. In 2015-16, institutions performed a self-study and gathered feedback from adult students that will help to create a campus-specific action plan for engaging adult learners. The standard also examined adult student graduation rates and compared them with the institution’s prior three-year average.
• Tennessee Job Market Graduate Placement
  • The community college job placement standard utilizes data from the Tennessee Longitudinal Data System (TLDS), which combines data from the Tennessee Department of Education, Department of Labor and Workforce Development, and the THEC. TLDS allows THEC to complete a statewide job placement analysis that is uniform across all community colleges, rather than conduct separate surveys.
• Student Access and Success
  • QAF focuses institutional attention on increasing the access and success of focus populations around the state. All institutions selected five populations on which to focus particular attention and resources throughout the 2015-20 QAF cycle. Students from low-income backgrounds and from underrepresented racial and ethnic groups are the most common focus populations selected by colleges and universities, and eight institutions chose to concentrate on veterans.

QAF works hand in hand with the outcomes-based funding formula. While state appropriations to each institution are largely determined through the funding formula, QAF provides an added incentive for institutions to focus on outcomes as well as quality by helping to assess program quality and ensuring that student outcomes are aligned with the state’s higher education goals.

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

The policy is overseen by the Tennessee Board of Regents. To learn more, visit https://www.tn.gov/thec/for-institutions/funding-information-for-institutions.html.