The Australian Centre for Student Equity and Success acknowledges Indigenous peoples across Australia as the Traditional Owners of the lands on which the nation’s campuses are situated. With a history spanning more than 60,000 years as the original educators, Indigenous peoples hold a unique place in our nation. We recognise the importance of their knowledge and culture, and reflect the principles of participation, equity, and cultural respect in our work. We pay our respects to Elders past, present, and future, and consider it an honour to learn from our Indigenous colleagues, partners, and friends.

You are reading: Student equity central to an effective performance funding model

A new report by La Trobe University has found that student equity is central to the effective implementation of university performance funding.

Under the model proposed by the Australian Government, universities would receive public funding according to their performance on outputs such as student completions, satisfaction, and outcomes.

The report, funded NCSEHE, analysed national data on retention, completion, satisfaction and employment, including for non-university providers. Performance funding models in the US and UK were also examined.

Executive summary

Governments have long sought to assess and reward higher education institutions for their performance. Understanding the relative performance of institutions in teaching, retaining and graduating students would provide accountability for growing public funding, and would also be extremely helpful for prospective students. What constitutes performance though, and how should it be measured?

To answer these questions, it is helpful to refer to the national objectives of higher education. Enshrined in legislation, the goals of Australian higher education include quality, diversity, and the promotion of student equity. ‘Performance’ would ideally be defined by institutional success against these inter-related objectives, whether assessing teaching quality or the ability to develop thoughtful, productive and employable graduates.

The following report does not attempt to provide a prescriptive definition of performance nor of potential metrics. We do not advocate the introduction or otherwise of a broad performance funding model, and we do not outline any specific, preferred version of a model that might be introduced. Instead, we focus on why, and how, any effective performance model would incorporate principles of student equity. Drawing on Australian higher education history, evidence from the United States of America (US) and United Kingdom (UK), and an analysis of contemporary Australian data, we argue that there are three fundamental principles required to ensure an effective and equitable performance funding model.

The first principle is to integrate student equity as an explicit objective of the model. Performance funding objectives need to align with broader national objectives of higher education, including the policy and legislative commitment to student equity. Analysis of Australian data reveals variable institutional commitment to the goal of widening participation, highlighting the potential value of including equity of access as a performance objective in its own right. The need to integrate student equity would also be inherent in the design of metrics for student success, retention, completion, satisfaction, and outcomes.

Secondly, embedding equity principles in performance funding requires the rewarding of genuine performance rather than simply outcomes. Controlling for student equity and/or correlated factors is critical to isolate performance and determine the value added by each institution. Relatedly, there is a need to develop measures of ‘learning gain’ and better understanding of the institutional contribution to graduate outcomes. Such work has the potential to disrupt existing research-based rankings and to identify institutions that are high performing in teaching and supporting students, including those from equity groups. Our analysis of current Australian data, however, suggests that many existing potential metrics are either negatively or not correlated with each other. In addition, the public universities report relatively homogeneous student outcomes on most measures. Significant further work is required to distinguish institutional performance in areas of teaching, success, student satisfaction, and graduate outcomes.

Finally, equitable performance funding models would be student-centred. This approach would involve including students in the design and assessment of any proposed model, and ensuring inclusion of the student voice within the performance metrics themselves. Further, models would provide clear and transparent information that students could easily access and understand, including for non-university higher education institutions. Indeed, our analysis suggests that non-universities include both the highest and lowest performers on many potential measures, but prospective students currently lack much of this information. Unless models are explicitly student-centred, performance funding could exacerbate inequity, partly by providing information that is accessible only to the most privileged students.

An equitable performance funding model would also need to observe broader established principles of good practice. Though some of these principles are not explicitly related to equity, it is important to note the need for:

  • efficiency, with limited transaction and implementation costs;
  • promotion of a developmental rather than punitive approach, which rewards institutions for improvement over time;
  • strong accountability, consistency, and stability, to enable long-term planning and to avoid perverse incentives and ‘gaming’ of the metrics;
  • expansion of institutional capacity to assist universities to analyse and improve their performance;
  • broad stakeholder engagement in design and implementation;
  • support of institutional diversity of missions; and
  • respect of provider autonomy, with prescribed uses of funding in place only when justified by strong policy reasons.

We have not addressed these principles in detail, but they remain central to the implementation of an effective and therefore equitable performance funding model.

Continue reading.