Overton: Reshaping university funding in Iowa

BY JON OVERTON | JUNE 23, 2014 5:00 AM

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Earlier this month, the state Board of Regents replaced the old funding model for Iowa’s three public universities with a new one that heavily favors in-state student enrollment.

The plan addresses a real problem: the University of Northern Iowa is consistently underfunded, in part because — as of the fall of 2013 — 89 percent of its students are from Iowa. Because out-of-state students subsidize in-state tuition, and UNI has few out-of-state students, UNI earns less revenue. In contrast, 54 percent of University of Iowa and 60 percent of Iowa State University students are from Iowa.

The regents are also concerned that so much state money goes to the UI, even though comparatively few students are from Iowa.

The new funding model intends to address UNI’s funding problems and increase overall in-state enrollment by basing 60 percent of state funding for Iowa’s three public universities on in-state student enrollment, 15 percent on degrees awarded and the pace at which students advance, 10 percent on a diverse student body — racial and ethnic minorities, low-income students, etc. — 5 percent on sponsored research, 5 percent for graduate and professional students, and 5 percent for the regents to distribute based on other metrics.

While this would bode well for both UNI and ISU, the UI would lose approximately $60 million by switching to the new funding model next year. Fortunately, the university has three years to bump up in-state enrollment, and when the new funding model is applied, revenues can change by up to 2 percent annually, preventing extremely dramatic financial shortfalls. For the UI, that could mean up to $13.5 million, which is still plenty of money.

The regents stated in their report on the new revenue model that “the value to the state of Iowa of this new funding approach warrants additional state funding to pay for the transition to the new funding model.” The state Legislature, which doesn’t always see eye-to-eye with the regents on higher education, would be responsible for that funding.

So basically, for this to work well, Iowa lawmakers must agree with the regents. And if they don’t, the UI potentially loses $13.5 million every year until we land wherever the new funding model places us.

The regents are treating each university as though it’s the same, but that’s not how it works.

According to college rankings from U.S. News & World Report, The UI’s strengths are all over the place: business, law, medical, fine arts, audiology, nursing, with similarly strong humanities and liberal-arts programs. These attract students from around the country and around the world. We’re institutionally big, we’re fairly prestigious, and we produce boatloads of research.

With as broad of a base as the UI has in high-quality programs, it will attract many people from many places, which, by the way, generates a lot of economic activity. If you look at the rankings, ISU and UNI are respectable, but in many aspects, they just don’t compare with the UI.

The regents also understandably want to keep college-educated people in Iowa, but if we’re going to stay, we need the jobs to keep us here. The job market in general is garbage. For many college students, it doesn’t matter where we get our degree or where we were born. If we can get a non-soul-sucking job in our field, we’ll probably take it wherever it is.

By all means, let’s help out UNI, but maybe we should exercise some caution before we start tying everyone’s funds so strongly to in-state enrollment, especially when we know that the results could lead to a lot of pain for a lot of people.

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