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2010 NEWSMAKER: Lubbers changes higher-ed funding

J.K. Wall
December 24, 2010
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Year In Review

Teresa Lubbers ushered in a new era in higher education financing this year. But she’ll need to persuade the General Assembly to stick with it in 2011.

Lubbers, Indiana’s commissioner for higher education, cut 2010 funding for Indiana’s seven state-sponsored universities by $150 million, with the most efficient schools getting smaller reductions and less efficient schools larger trims.

The commission defined efficiency mainly by graduation rates and spending per graduate. By those metrics, Ivy Tech Community College came out best and received the smallest cut in funding, 3.7 percent. Indiana State University looked worst, and therefore received the largest cut, 6.6 percent.

The goal of the performance-based funding is to curb universities’ current incentives to boost their state funding merely by signing up new students but instead to show more success at producing graduates.

Teresa Lubbers Lubbers

The percentage of undergraduates who finish in six years ranges from a lowly 43 percent at ISU to 73 percent at Indiana University’s Bloomington campus. The amount of money per graduate spent by each four-year university varies from $87,000 at Ball State University to $111,124 at Purdue University’s West Lafayette campus.

Performance-based funding for universities is not brand new. But the willingness of the commission and Gov. Mitch Daniels to stick to a performance-funding formula even when taking money away from schools caught people’s attention.

“Whenever talk of budget cuts shows its head, usually any talk of performance funding is immediately put down,” said Derek Redelman, education lobbyist for the Indiana Chamber of Commerce.

But Lubbers has shown no signs of turning back. Her agency will recommend that even more funding hinge on universities’ performance during the budget-writing process that will take place in the General Assembly in 2011.

“What it clearly makes is a statement,” Lubbers said, “that this is the direction which we will continue to recommend.”

Lubbers, a former Republican state senator and the wife of former Daniels adviser Mark Lubbers, will have her own party in full control of the budget this year. Republicans, who dominate the Senate, also took a commanding majority in the House of Representatives during the November election.•

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