NSHE updates funding formula proposal 


All resident, non-resident tuition would be retained at schools; only in-state students would be counted in performance metrics 

The Nevada System of Higher Education’s proposal to redesign the state funding formula now includes a provision to allow all student tuition and fees to be retained at the schools that generate them.

NSHE Chancellor Dan Klaich presented the system’s revised plan to the state Committee to Study the Funding of Higher Education yesterday. He told the group that the change came after exhaustive talks with student, faculty and staff leaders and the presidents of the seven institutions that would be affected.

“We believe that you should use a formula that allocates only General Fund dollars,” Klaich told the committee, making a distinction between taxpayer dollars and the money students pay to attend school.

Under the current formula, both resident and non-resident tuition and fees are routed through the state and redistributed to schools. The process has led to widespread belief that the funding formula causes inequities that favor Northern over Southern Nevada schools and four-year institutions over community colleges.

The updated NSHE plan would give funding incentives based on performance — likely including graduation rates — based on the performance of in-state students only.

The system’s proposal would count students in the Western Undergraduate Exchange as out-of-state students for the purpose of the formula’s metrics.

WUE students are often offered discounted tuition at Nevada colleges and universities.

Not all NSHE schools recruit students actively by offering the WUE discount.

“The way the [existing] formula works, the institutions that recruit with full-pay out-of-state tuition are disadvantaged,” Klaich said.

He explained that under the formula NSHE is suggesting, schools could recruit using WUE discounts or not, but each school would be responsible for the funding it brings in through non-resident tuition.

The basis of the NSHE plan is still the “weighted credit hour” — a concept Klaich suggested in his basic pitch in January — but that model has been developed further by the work of the National Center for Higher Education Management Systems. The private consulting firm used what Klaich called “long-term, longitudinal” studies conducted in other states to help develop a a matrix that reflects what different types of courses may cost.

The model differentiates between lower-division and upper-division courses and between undergraduate and graduate courses, for example.

Gregory Mosier, a non-voting committee member appointed by Gov. Brian Sandoval, expressed concern that the weighted credit hour matrix might lead to a system in which the majority of students, taking lower-division undergraduate courses, paid for small, expensive classrooms like high-tech labs.

“That might lead to a skewing of our opportunity to align with economic development [goals] in the state,” Mosier said.

Klaich responded by saying that though high-enrollment, low-cost courses may bring in money to pay for low-enrollment, high-cost ones, the NSHE model would Nevada’s research institutions — UNLV and the University of Nevada, Reno.

“There is no policy component to this matrix,” Klaich said, asserting that it aims to reflect the cost of producing a piece of work that the state wants but does not attempt to dictate what the state’s ideals should be.

Klaich called the matrix “cost-informed,” meaning that it aims to show how much it really costs to produce a given type of course.

However, the matrix does not account for what some believe is the extra cost of offering remedial courses.

He said that in the performance segment, the updated proposal would account for the value of passing a student through remediation and into standard college courses, but that no extra funding would be given to offer remedial courses.

Acknowledging that the issue of remediation funding has been hotly debated, Klaich urged the committee to “not let the perfect become the enemy of the very good.”

The committee voted to establish a contract with SRI International to complete a study of the existing funding formula and the replacement recommended by NSHE.

Five firms bid for the job. Senate majority leader Steven Horsford, who chairs the committee, said that making the right choice was crucial to helping the group make good decisions and defend those decisions in the future.

“Whatever findings we come up with,” he said, “there will be those who want to attack those findings later.”


Haley Etchison reports on the Nevada System of Higher Education and the Nevada Legislature for The Rebel Yell. Contact her at [email protected]

This story originally reported that Klaich’s first redesign draft, which he presented in January, asked that the state allow institutions to keep the money they gain from in-state tuition but did not suggest changing the way the state deals with out-of-state tuition. In fact, Klaich said that the NSHE proposal has always asked for complete tuition and fee retention.

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