May 12, 2022

BY Elyssa Cherney | Crain’s Chicago Business

Illinois is moving to create an equity-based funding formula for higher education, potentially setting up a clash among the state’s 12 public universities over a limited pot of state dollars.

A commission established by state legislators is exploring ways to reallocate those dollars to help Black, Latino and low-income students. But one early and central discussion point at the Commission on Equitable Public University Funding is likely to create tension: Should appropriations be tied to the demographic composition of a school’s graduates?

Under such an approach, the state’s largest and most influential school—the University of Illinois Urbana-Champaign—could lose funds to less selective, regional ones, such as Governor’s State University and Chicago State University, which enroll fewer people but have higher proportions of low-income and minority students. Lawmakers and advocates are especially focused on boosting outcomes for Black undergraduate students because that group has experienced the steepest enrollment losses—plummeting 34% between 2013 and 2019 compared to 25.9% for white students and 19.4% for all undergraduates.

“It’s important for us to look at our enrollment of African American students—it’s not where it should be,” said state Rep. Carol Ammons, a co-chair of the 33-member commission who sponsored the bill that created it. “I don’t see how we get to equity without looking at reality.”

Per the law, the commission must by July 2023 “recommend specific data-driven criteria and approaches to the General Assembly to adequately, equitably, and stably fund public universities.” The measure, included in a package of education reforms advanced by the Illinois Black Legislative Caucus following the death of George Floyd, acknowledges the role that “historical and continued systemic racism” has played in higher education.

Yet crafting a formula that takes these factors into account will be a complex and arduous process. Currently, universities petition lawmakers with requests and typically get across-the-board increases or decreases based on the prior year’s allocation, which locks in funding gaps between wealthier schools that have larger endowments, donor support, and research grants and institutions with less money that serve proportionally more diverse students.

Schools, however, could perceive a risk of losing out on money if they don’t enroll and advance more low-income students and students of color. And it’s not clear at this juncture how these metrics would be weighted in the calculations. The worst result would be universities jostling against each other to avoid cuts.

So each university, which has a seat on the commission, is bound to push for a hold harmless clause to ensure their budgets won’t fall below current levels. In that scenario, the formula would be applied only to new state money appropriated beyond a base level of funding that’s established, much like what occurred when the formula for K-12 schools was created in 2017. That means lawmakers must approve significantly more spending on higher education to move the needle on equity goals.

A look at U of I’s downstate campus reveals the challenging nuances for devising a formula. While the university enrolls the second-most Black undergraduates—2,120 undergraduates out of 33,001 in fall 2020—they comprise the lowest percentage of its total student body at just 6.4%, according to data provided by the Illinois Board of Higher Education. Northern Illinois University enrolled slightly more Black students at 2,355, but they make up nearly 20% of the school’s undergraduates.

The University of Illinois Chicago is in an arguably better position. About 34% of students are Hispanic and 21% identify as Asian or Pacific Islanders.

Chicago State University and Governor’s State University currently have the largest shares of Black students, at 72% and 38%, respectively. But they serve fewer total students and get the least state funding.

Of the more than $1.2 billion allocated for higher education in next year’s state budget, more than half—$655 million—went to the University of Illinois System. The combined 57,283 undergraduates at its three campuses make up about 45.6% of all undergraduates in the state, IBHE data shows. For their operating budgets, Governor’s State received $24.4 million, Chicago State received $36.8 million and Northern Illinois University got $92.2 million.

U of I has said little publicly about its stance on a funding formula and didn’t make anyone available for an interview.

Deputy Governor for Education Martin Torres says the formula recommendations aren’t likely to come before the General Assembly before 2025.

If the formula takes minority enrollment into account, it almost certainly will also link funding to outcomes—retention and graduation rates.

Urbana-Champaign leads the pack when looking at numbers in isolation. According to an analysis by the Partnership for College Completion, a Chicago-based nonprofit that advocates for equity, the U of I’s flagship campus conferred 481 bachelor’s degrees on Black students last year, followed by UIC with 383 and Northern Illinois with 330.

But for U of I, that meant just 6% and 8% of all bachelor’s degrees went to Black students at the Urbana-Champaign and Chicago campuses, respectively. Chicago State awarded 224 degrees to Black graduates, which represented 71% of the school’s total degrees.

Chicago State President Zaldwaynaka “Z” Scott said her school, which relies on state appropriations as its largest revenue source, would benefit from an equity-based formula because there are additional costs for academic and social supports to help high-needs students advance. For example, the school puts on a five-week college introductory course called Rise Academy, which awards full tuition and fees to first-year students who complete it. They are more likely to remain in school than students who don’t do the program.

“I won’t have to make the choice of fixing the roof or fixing the pipe versus hiring another adviser or training another advisor because that expense has been accounted for in the funding formula,” Scott said.

Advocates say state funding for university operating budgets—which has declined significantly in real and adjusted terms from its peak of $1.5 billion in 2002—shouldn’t be viewed as a zero-sum game. As state funding fell, schools boosted tuition to make up the difference, deterring low-income students from attending and sending residents to cheaper universities out of state, where they stay and contribute to the economy.

“Everyone is going to need to think beyond their own immediate interest and work together toward bigger goals that can lead to more equitable outcomes for students,” says Lisa Castillo Richmond, executive director the Partnership for College Completion. “If everyone just advocates for themselves, our students could end up worse off.”

Adam Schuster, vice president of policy at the libertarian-leaning Illinois Policy Institute, says he supports the goal of making college more accessible but warns that a formula favoring specific racial groups could invite legal challenges, like the affirmative action cases that landed at the U.S. Supreme Court.

“If there’s a way to attain greater equity and outcomes that doesn’t require race-based discrimination in the process,” he says, “that might actually be more effective and less controversial.”

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