Running head: COMPETENCY-BASED EDUCATION

Maximizing Efficiency through Competency-based Education at Community Colleges SDAD 585: Higher Education Finance Katie C. Pinney Seattle University August 7th, 2013

COMPETENCY-BASED EDUCATION Introduction Affordability is a key element to college opportunity and access. With tuition prices on the rise, public and private institutions are making opportunity and access less and less of a reality for our nation. In the last 15 years, the University of Washington has quadrupled tuition for residents to $12,000 per year. This is not unique to just this institution; tuition increases are seen across the nation. What does this say about the future of higher education and the students who enroll- or do not enroll? How will this ultimately affect our nations economy if the population is not prepared for available jobs because they did not receive a higher education? These are real and important questions we need to be asking. According to the National Center for Public Policy and Higher Education, family wealth and income are the best predictors-over academic preparedness- of who will actually enroll in college (2002). With four-year colleges becoming more and more unaffordable, 2-year community and technical colleges are where our nations future students are turning to in order to obtain an education and degree. Community colleges are the most efficient sector in higher education. These colleges are using their funds in an intentional, efficient, and productive way, in order to maximize their resources. Unlike their 4-year counterparts, community colleges have an open-access model, so their population os students have many different and unique needs. Because of this, community colleges offer remedial courses, adult basic education courses, ESL, along with short term-certificate programs and associate degrees. With very limited and restricted resources, these colleges must utilize their funds and resources in a creative and productive way.

COMPETENCY-BASED EDUCATION Most often, community colleges offer an affordable option for education, as well as an open-access model of admissions. They are low cost for students who enter compared to their 4-year counter parts. In Washington state, full time students who take 15 credits per quarter will pay $1,333 in tuition, or $4000 for the year. This is one-third the cost of the 4-year option at University of Washington. With federal aid and other forms of aid available for students, the community college rate will mean a higher return on investment over attending a 4-year institution on federal aid. Still receiving a high quality education, the number of full time faculty teaching at a community is comparable to that at the university level. Class sizes are also much smaller, which is conducive to student learning. At the University of Washington, a freshman biology class has 700 students in one lecture. Due to state budget cuts, institutions are forced to increase class sizes tremendously, as seen in this case (Perry, 2010). At community colleges, a class will average 25-30 students. There are no large lectures, which means that students can get to know their professor and their professor can get to know them. This type of environment is more conductive to individualized learning. Because of their abundance of short-term certificate programs, community colleges accommodate most new students who enter their doors. According to the Delta Cost Project, in 2010, community colleges accounted for 450,000 new FTE students (2012). With enrollment on the rise at this institutional type, it is important for college leaders to consider the variety of ways to not only serve the unique students, but also must consider the best way to use their money. In addition to state appropriations, which average $5,500 per student, funding sources include tuition, fees, grants, donations, international student tuition, financial aid and money from athletics.

COMPETENCY-BASED EDUCATION While community colleges have to be very frugal with their spending, given the current state of the economy, they have a lot of room for creativity when in comes to the way they educate students. Since the population of students at community colleges reflects the community it resides in, every community college looks much different from the next. But its safe to say that no matter where the college, the population of students will have unique needs and interests. One way of teaching and providing courses simply will not suffice. Community colleges are getting more and more creative with the way they deliver classes in order to stay as cost efficient as possible. Funding Structures For the purposes of this section, I will use the state of Washington as an example. For over 20 years, community colleges have received over 50% of their overall funding from the state. Even still, this funding per full time equivalent (FTE) student is less than public research and comprehensive universities in Washington. According to the Washington Higher Education Coordinating Board, nearly 50% of community colleges overall budget is dedicated to instruction, compared to research institutions which is only at 32%. Community colleges, along with comprehensive universities are dedicating a large percentage of their budge toward teaching and instruction (2009). These funds are directly tied to student learning and engagement. As mentioned many times, tuition prices are on the rise all over the nation. In Washington, since 1990, tuition has increased by 150% at community colleges from $500 to $1,250, 151% at comprehensive universities from $1,350 to $3400, and a staggering 194% at research universities. While comprehensive universities are very comparable to community college in their tuition increase percentages, community colleges have still

COMPETENCY-BASED EDUCATION been able to offer a lower cost compared to what the state is giving. In 2009, tuition prices and state funds were nearly identical at research and comprehensive institutions, where at community college there was still a significant gap between how much students are paying in tuition and how much the state is giving. State appropriations are nearly three times the amount that students are actually paying in tuition. State funding has also not changed much over the last 20 years at community colleges, whereas at comprehensive and research institutions, state appropriations have gone down significantly. Even in a recession, the state still contributes the same amount of funds to community colleges. The funding structure at community college reflects how efficient their spending is. Because they receive a lower dollar amount compared to their 4-year counter parts, they have to be smart with their money. Over the years, the state has been able to contribute the same amount per student per year, where as at the 4-year institutions, it has decreased significantly. This is important to recognize because as enrollment being as high as it is, state funding is the most important contribution at community colleges. It is essentially what keeps their colleges doors open. Without the states help, these colleges would be in bad shape. Competency-based Education Affordability will be critical for continued growth in college completion rates. In order to meet this need, colleges and universities must provide support mechanisms to ensure that students persist to degree competition (Education Roundtable). Persisting to completion can mean a number of different things, such as repeating failed courses, or simply moving forward through the degree. If a student needs to repeat a failed course,

COMPETENCY-BASED EDUCATION they are taking the seat of another student who may succeed in the class the first time around. They are using up valuable resources that are limited at the institution: time and money. When one group of students completes their degree in a timely fashion, institutions have more resources available for the next wave (Baker, 2013). One way that universities are being creative is through innovative teaching models. More specifically, through online education, students who may not have persisted to completion for a variety of reason are given a second chance or a more flexible way to earn their degree. For many years, community colleges have had online class options for students.. The reality is, not all students are going to succeed in the online environment. Often times, online courses will require more from students; more accountability, focus and motivation to get the work done. Additionally, with the ever changing wave of technology, the cost to provide quality online classes has become expensive; it requires software upgrades, more extensive IT department which leads to more staff, salaries, and professional development for those instructing courses. Some institutions that believe in online education as the future of higher education have decided to lead a creative movement towards competency-based education. The Florida Department of Education defines competency-based education as an educational approach based on a predetermined set of knowledge, skills, and abilities that the student is expected to accomplish (2012). This approach to learning allows students to earn their degree by demonstrating what they already know and can spend valuable time in class on what they need to learn.

COMPETENCY-BASED EDUCATION Western Governors University (WGU) is among the more notable competencybased online programs. WGU is a 100% self-sustained program, receiving no state funding per student. Tuition is relatively low at $6,000 per year and the institution relies and operates on this tuition alone (2013). In the state of Washington, WGU has become the fourth transfer destination for students and continues to grow each quarter. According to the universitys chancellor in Washington, Jean Floten, the WGUs expenditures consist of direct instruction, marketing efforts, administration and IT staff salaries (personal communication, July 24th, 2013). Because the school is 100% online, there are no buildings to upkeep, no physical and other auxiliary services to provide and pay for such as hospitality and bookstore services. The school relies solely on the money from tuition to keep the school moving forward. In the community college sector, the Kentucky Community and Technical College system is among the growing number of institutions who are giving competencybased education a try. Faculty at Kentuckys community colleges studied Western Governors Universitys model of competency-based education very closely as they began to expand on their online model. They called the program Learn on Demand. It serves thousands of students per year in Kentuckys online system. Tuition is extremely low at $144 per credit hour, which they claim is among the lowest in the nation, (Fain, 2012). Learn on Demand is unique in that it offers two types of classes: full courses or modules. Modules are mini classes which when pieced together create a full course. Students will only pay then a portion of tuition for a module. Learn on Demand is completely self-sustained, unlike the rest of the Kentucky Community College system which relies on state appropriations. This program started

COMPETENCY-BASED EDUCATION because of a loan from the Kentucky Council of Postsecondary Education (KCPE). According to College Productivity, KCPE felt in order to meet the economys need for credentials of value, colleges must provide flexible, affordable programs of study for independent learners and working adults. Many of these learners need credentials to advance in the workplace, yet traditional means of education lack the flexibility they need to progress and succeed (2012). After paying back the loan, the Learn on Demand program is running sufficiently on tuition alone, and even generating revenue for the rest of the Kentucky Community College system. It projected revenues of $3.7 million in 2013 with a net profit of $2.3 million. This type of profit for the institution can result in a number of improvements and initiatives statewide which will highly benefit the students they serve. With 16 community colleges in the Kentucky Community and technical college system, this is over $140,000 per school in revenue if the system distributed it evenly across schools. People often question the credibility of online programs given the poor reputation that many for-profit institutions online programs have, such as the University of Phoenix. With high tuition prices, and low retention, many students in fact, leave those proprietary institutions with high loans and no degrees. This could be due to the lack of student support and resources. Recently, the Learn on Demand program received a $1 million grant through the Complete College American grant program. The grant will be used to improve academic advising and tutoring services for the student specifically enrolled in the program, provide and enhance professional development opportunities for staff involved in the program, and support program outreach to students in the state of Kentucky (Kentucky Council on Postsecondary Education, 2011). The state felt a need to

COMPETENCY-BASED EDUCATION improve this program because so many students are needed to complete degrees in a short period of time. This program is the perfect solution for some students. Students in which this type of education is targeting are adult learners; people who are non-traditionally aged and have spent some time in the work force. These students are looking to complete a degree in a short amount of time in order to change careers or receive a higher pay grade at their current place of work. Going back to traditional college does not seem like a reasonable or efficient option so they are turning to online or competency-based programs. According to Barr and McClellan, higher education institutions, whether public or private, are experiencing great changes related to identifying and capturing fiscal resources to support educational endeavors. The broader fiscal context of higher education sets very real constraints on what can and cannot be done in any institutions of higher education (2011). Community colleges are experiencing these constraints as well, but Kentucky was smart in their innovative solution to supporting education endeavors by creating the Learn on Demand program (Barr & McClellan, 2011). Conclusion Community colleges are working harder than ever to be as innovative as possible when it comes to serving students in the most efficient and cost effective way. Through the creative model of Learn on Demand, that Kentuckys community college system has implemented, cost per student is cheaper and the cost a student endures to receive an education is also low. Additionally, students can move through and persist toward graduation quicker. Specifically in Washington, where performance-based funding is in place, the community college system should consider implementing a competency-based

COMPETENCY-BASED EDUCATION education component which could potentially improve their achievement points. Additionally, with the high revenue and profit that this program as generated in Kentucky, these funds could improve the community colleges, not only structurally, but through additional resources, initiatives, programs, technology and so forth. State policy makers and stakeholders should consider how improving and expanding the online programs offered at community colleges, if done right, could make a positive impact on the states higher education system and economy. Because college access is directly linked to affordability, more students are turning to community colleges to begin their degree or to obtain a professional degree so they can either begin work right away. While obtaining an education takes time and because our nation is in an economic crisis, there simply is not enough time for people to be waiting around to get educated. Costs are low at the community college and the state is spending less money per pupil than their 4-year counterparts. Through online education, community colleges can be creative in their course and degree offerings which could allow for students to earn degrees faster.

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COMPETENCY-BASED EDUCATION References Baker, B. The wrong thinking about measuring costs and efficiency in higher education (and how to fix it!). Retrieved August 3rd, 2013, from http://necp.colorado.edu/blog Barr M.J., & McClellan, G. S. (2011). Budgets and financial management in higher education. Jossey-Bass: San Francisco, CA College Productivity, HCM Strategists (2012). Kentucky Learn on Demand: Creating a systemwide, competency based online program. Retrieved from www.collegeproductivity.org/sites/default/files/lod_policy_analysis_final.pdf Delta Cost Project, American Institutes for Research. (2012). College spending in a turbulent decade: Findings from the Delta Cost Project. Retrieved from www.deltacostproject.org/pdfs/Delta-Cost-College-Spending-In-A-TurbulentDecade.pdf Fain, P. (2012, August 6). Competency-based online program at Kentuckys community colleges. Inside Higher Ed. Retrieved from http://www.insidehighered.com Glossary of terms, Florida Department of Education. (2012). Retrieved August 2nd, 2013, from http://www.fldoe.org/fcs/glossary.asp Indiana Education Roundtable. (2012). Higher Education & Continued Learning. Retrieved from www.in.gov Kentucky Council on Postsecondary Education. (2011). Governor Beshear announces Kentucky wins funding to substantially transform remedial education [press release]. Retrieved from http://cpe.ky.gov/news/mediaroom/releases/nr_072811.htm

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COMPETENCY-BASED EDUCATION Learn on Demand, Kentucky Community and Technical College System. (2013). Retrieved August 3rd, 2013, from http://learnondemand.kctcs.edu National Center for Public Policy and Higher Education (2002). Losing ground: A nation status report on the affordability of American higher education. Retrieved from http://www.highereducation.org/reports/losing_ground/affordability_report_final_b w.pdf Perry, N. (2010, January 26). Budget cuts swell class sizes at UW. The Seattle Times. Retrieved from http://seattletimes.com Washington Higher Education Coordinating Board. (2009). Current Higher Education funding structures and state funding cycles: What fiscal priorities are needed for funding the eventual System Design Plan? Retrieved from www.wsac.wa.gov/sites/ Western Governors University. (2013). About WGU. Retrieved from http://www.wgu.edu/about_WGU/overview

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