Leave No College Student Behind: Rewarding Institutions That Help At-Risk Students

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Michigan’s economic growth depends on a skilled workforce. Nontraditional students (those older than 24 and/or raising families) and students needing basic skills remediation make up an important part of Michigan’s labor pool and need to be part of Michigan’s strategy to build the skills of its workers.

The performance funding system put in place this fiscal year for public universities and community colleges includes metrics that address many important aspects of workforce development, but the system needs to be improved to help improve the success of low-income students and students needing remediation as important agents in Michigan’s economic recovery.

The governor and Legislature should implement incentive funding for institutions based on how effectively they promote student success and postsecondary accessibility for these populations.

Many students begin postsecondary education programs but do not complete them. Only about half of Michigan’s community college students attain a credential or transfer to another institution within six years, and only 60% of four-year public university students graduate within that time. In light of Michigan’s workforce needs in a competitive economy, the state cannot afford to lose this many potential skilled workers who had the motivation to enroll in college.

While we do not know all the reasons so many individuals are dropping out of postsecondary education, it is likely that many are doing so for at least one of two reasons: 1) they are running out of money or are fearful of amassing unmanageable debt, or 2) they are not succeeding academically because they have not mastered one or more basic skills and need remediation.

Michigan’s decision to appropriate a portion of its higher education and community college funding using performance metrics provides an opportunity to address student success in the budget process and rewards institutions that are successful in helping students succeed.

At the outset, it should be said that such performance funding should not be punitive (depriving some institutions of needed base funding increases), because it is assumed most or all institutions are making a good-faith effort to help their students succeed. Rather, the reward money should be allocated in addition to base funding annual increases in order to enable and encourage institutions to provide resources for student success programs and to encourage the sharing of best practices among institutions.

A well-designed incentive funding system can address both the inaccessibility of college due to high tuition costs and the difficulty a large number of students have in completing their programs.


The Fiscal Year 2013 Higher Education and Community College budgets include additional funding for institutions based on meeting performance metrics. The budget for public four-year universities includes the following benchmarks:

• Tuition restraint (keeping increases low)
• Total degree completions
• Total degree completions in science, technology, engineering and mathematics (STEM) and
health fields
• Six-year graduation rate
• Institutional support as a percentage of core expenditures
• Research and development expenditures

The budget for community colleges includes funding based on the number of student contact hours and completions.

The university performance metrics address important objectives. However, only the tuition restraint measure addresses the problem of the decreasing affordability and accessibility of postsecondary education. The cost of going to college, combined with the elimination of many state financial aid programs, keeps many low-income students from completing the requirements for a degree or credential (and causes difficulty for many middle-class students and their families as well). The governor had proposed a metric based on the three-year average number of undergraduates receiving a Pell Grant, but that metric was not included by the Legislature.

The three metrics for student success (degree completions, STEM and health degree completions, graduation rates) measure final outcomes, which is appropriate. However, low-income students and students needing some level of remediation have more barriers to success than other students, especially if they are older, working a job and supporting a family. If there are not metrics that incentivize the persistence and success of these populations, there is a risk that institutions will not devote significant resources to helping them, as they will be considered a liability on the completion and graduation rates. Michigan should provide additional performance funding that rewards four-year and community colleges that effectively serve students needing remediation.

It is important that adding such metrics to the performance funding formulas not penalize institutions that attempt to do the right thing for low-income and low-skill students. Developing programs to help these populations succeed costs money and carries a certain amount of risk; such students are more likely to drop out than those from affluent families (due to economic and other reasons) and hence can be a liability on the graduation rates. Moreover, state support for postsecondary institutions has decreased significantly over the past 10 years. Institutions that help such students succeed should therefore receive incentive funding for these metrics in addition to an annual increase in base funding rather than in place of it (as is currently done with all the components of performance funding).


Include a metric that rewards institutions that enroll and graduate low-income students.

Tuition at four-year universities has risen dramatically; most institutions have more than doubled their tuition rates since 2003. At the same time, some state need-based grant programs have been cut or eliminated, resulting in a nearly 50% reduction in the number of students receiving grants. These two factors have made it very difficult for individuals of modest means to afford postsecondary education.

The Legislature did not adopt the governor’s metric rewarding universities for the number of undergraduates receiving a Pell Grant, leaving the performance funding system without a metric addressing college access by low-income individuals. It is hoped that the Legislature will include a metric that rewards institutions for facilitating their success. For Michigan to become a high-skill state and grow and attract business, it must increase the skills of this important population and integrate it into the skilled workforce.

Include a performance metric that rewards postsecondary institutions that effectively serve students who need skills remediation.

Many adults age 25 and older enroll in postsecondary skills training in order to expand their job opportunities. In 2011-2012, such students made up 30% of all community college and public university students in Michigan. These nontraditional students often face challenges, such as the need to raise children, maintain a household and work full time while completing coursework. These challenges put constraints on the time spent in classes and study each week, as well as the number of years needed to acquire a credential.

A large number of nontraditional students have the additional challenge of having insufficient basic skills readiness for college level work. Community and four-year colleges respond by requiring developmental education classes, which generally do not count toward a degree. The most recent data available shows that 36.5% of community college students and 13% of university students in Michigan were enrolled in at least one developmental education course. Approximately 30% of community college students enrolled in developmental education are nontraditional (age 25 or older).

If work and family needs create hurdles for nontraditional students, developmental education requirements raise the hurdles higher. One challenge is cost. Developmental education classes cost the same as those leading to a degree, causing some students to exhaust both their out-of-pocket resources and financial aid while being no closer to gainful employment than when they started. This is especially true in light of the recent increases in Michigan public university tuition (community college tuition has not risen significantly) and the concurrent cuts in Michigan financial aid grants.

Another challenge for adult learners needing developmental education is time. Community college developmental education is most often delivered in the form of classes taken separately from courses that lead to a degree. In many cases, they are prerequisites to for-credit classes and may not be taken concurrently. For students who need more than one developmental class, this lengthens the time needed to complete a course of study. Some students spend their entire first year or more in noncredit developmental education classes.

If a student must cut work hours to accommodate a class and study schedule, spending longer in school because of developmental education requirements means more forgone household income. For students raising families, it means less time spent with their children, and increased transportation and child care costs. When developmental education prolongs the duration of time in school, it can be a disincentive to enroll in a postsecondary program or a major reason for dropping out.

A recent study of adults ages 22-30 found that over half of those who drop out of college before attaining a degree or certificate cite difficulty balancing work and school as the primary reason. More than one-third of those said it would be difficult to go back even if tuition and books were fully paid for, citing “working full time” and “family commitments” as the top two reasons. It is easy to see how developmental education requirements can exacerbate these difficulties.

Students needing remediation are often the most difficult and expensive to serve, and are more likely to drop out before successful completion of a program and attainment of a credential. Institutions that effectively help such students persist and complete requirements for an occupational credential should be rewarded. Incentive funding for successful remediation must be in addition to increases in base funding rather than be a substitute for increases.

When developing a strategy to increase student success, measuring and rewarding persistence is as important as measuring and rewarding completion. With this in mind, the Working Poor Families Project has recommended that metrics and benchmarks should focus on key transition points such as the following:

• Transition from developmental education in a first collegiate gateway or initial course
• Attainment of the first 15 and 30 credit hours of collegiate instruction
• Receipt of a credit-based degree, diploma or certificate

To establish performance-based incentive funding for developmental education, Michigan’s P-20 data collection system needs to collect more detailed information on transition points such as those recommended above. It would also help in the designing of programs if data were collected that would shed light on the success rate of students who transfer from adult education or English as a Second Language programs into postsecondary programs. Currently, postsecondary institutions are required to submit minimal data regarding developmental education (i.e. number of student contact hours per academic year). The technological transition needed to put a system in place for capturing more detailed developmental education information will not happen overnight; the state needs to begin planning for it if it wants to undertake a serious effort to help remedial students succeed in postsecondary training and become employed in a skilled occupation.


Performance funding is an imperfect system for funding postsecondary education in Michigan, especially in light of the overall decrease in state funding over the past 12 years. However, it should be improved to reward institutions that go to the expense (and take the risk) of serving students from low-income backgrounds or who need remediation in one or more basic skill areas. The funding should come as an added incentive rather than in place of base funding increases, as a new investment in Michigan’s workforce.

Making such a change would help those students obtain a postsecondary credential leading to skilled employment. That would be good for the students and their families, because such employment would lead to higher salaries and less likelihood of falling into financial difficulty. It would help strengthen Michigan’s workforce, as it would provide the skilled workers that employers are seeking. Finally, it would help Michigan’s economy, as it would lead to more money spent in local communities and increase revenue collected in taxes by the state.

Michigan has already implemented a performance funding system for the purpose of strengthening Michigan’s workforce. Let’s not forget the part of the workforce that is currently low income or that needs basic skills remediation before moving on to occupational training. If we want to build Michigan into a magnet state for employers needing skilled labor and encourage high-skilled entrepreneurial activity, we cannot leave those workers behind. That means not leaving behind low-income students and those needing college remediation.


1. Michigan Community College Association and the National Center for Education Statistics via the Michigan Dashboard (http://www.michigan.gov/midashboard, accessed on March 5, 2013.)
2. Michigan League for Public Policy, Keeping It Affordable in Michigan: Disinvestment in Financial Aid Grants Hurts Students and Their Families, November 2012.
3. Michigan League for Public Policy, ibid.
4. Michigan Department of Technology, Management and Budget, Center for Educational Performance and Information, “MI School Data.” (https://www.mischooldata.org/CareerAndCollegeReadiness/IheEnrollmentByIhe.aspx, accessed on March 5, 2013.)
5. Michigan Department of Technology, Management and Budget, ibid.
6. Michigan Office of the Auditor General, Audit Report: Performance Audit of Developmental Education at Michigan Public Community Colleges, May 2009.
7. For more information, see Michigan League for Public Policy, Keeping It Affordable in Michigan: Disinvestment in Financial Aid Grants Hurts Students and Their Families, November 2012. (http://www.mlpp.org/wp-content/uploads//Keeping-it-Affordable-FINAL.pdf)
8. Johnson, Jean and Jon Rochkind, With Their Whole Lives Ahead of Them: Myths and Realities about Why So Many Students Fail to Finish College, Public Agenda, 2009.
9. Johnson et al., ibid.
10. Quinterno, John, Policy Brief: Making Performance Funding Work for All, The Working Poor Families Project, Spring 2012.
11. More information on the P-20 system and developmental education can be found in the Michigan League for Public Policy, The Key Ingredient: Data is Crucial to Building Michigan’s Workforce System, July 2011. (http://www.milhs.org/wp-content/uploads/2010/07/TheKeyIngredient.pdf)