Manitoba looks to Tennessee model in efforts to tailor post-secondary education to labour market

Premier Brian Pallister is looking at the example of an American state that pioneered performance-based funding for post-secondary institutions, as Manitoba seeks a new way to finance higher education.

The premier met with the University of Manitoba's new president, Michael Benarroch, in September. The premier expressed interest in following the lead of Tennessee, says Benarroch, but perhaps not that of other Canadian provinces that have explored performance-based funding, like Alberta and Ontario.

"Interestingly, the premier said in our conversation that he didn't want to make the mistake that some of the other provinces have made — he didn't want this to be a hammer," Benarroch told a U of M senate meeting on Oct. 7.

"And he referred to, as our [economic development] minister has done … the Tennessee model, which is one that shows up in the United States as the ideal of these kinds of models."

Benarroch later urged his colleagues to explore what Tennessee has done.

"We can help to influence government's direction as they move forward with this," Benarroch said in an audio recording of the virtual meeting, which CBC News requested from the university.

In the last year, Manitoba's Progressive Conservative government has repeatedly signalled it wants to tailor universities and colleges to more closely meet labour market needs, but hasn't explained what that might look like.

If Manitoba emulates Tennessee's policy, it wouldn't be the only jurisdiction.

A majority of American states have developed post-secondary funding models based on performance — rather than enrolment numbers — since Tennessee started doing so in 1979. The use of the model has varied significantly, however, and been discontinued in some cases. 

Tennessee bases about 83 per cent of its post-secondary funding allocation on a set of weighted outcomes and "quality standards," and the remaining 17 per cent on fixed costs, according to a state document.

The lion's share of funding is based on outcomes like graduation rates, the number of degrees awarded, the number of credit hours obtained and the certificates and degrees granted per 100 full-time students. Lower-performing schools receive a smaller grant.

MacGregor Obergfell studied Tennessee's approach as a former research intern with the New America, a public policy think tank.

"It can work, but you have to be very careful with how you develop it," he said in a phone interview from Washington, D.C.

A funding model incentivizing graduation rates and certain majors may stop some students from applying, Obergfell said.

"If they're not set up in a way that really makes sure that the institution is still a place that is accepting of students and is there to help them succeed through enrolment to graduation, they can actually be counterproductive in practice."

Disadvantaged students prioritized

Tennessee's financing model has been evolving, in part, to address these criticisms. The funding formula can be revised every five years, and a premium is now placed on advancing students from disadvantaged backgrounds. As well, institutions can weigh some metrics as more valuable, depending on their priorities. 

The financing model is also helped by a suite of other initiatives to encourage enrolment, Obergfell said, including free community or technical college for some residents and a campaign to get post-secondary credentials for 55 per cent of Tennesseans by 2025.

An outcomes-based model "has to be incorporated with other programs designed to increase access" for students, he said.

Scott Forbes, president of the Manitoba Organization of Faculty Associations, said these policies yield minimal, if any, benefits, but come at a significant cost.

"The universities, if they're penalized for having lower participation rates, lower graduation rates, lower retention rates … simply change their entrance standards," said Forbes, referring to research that found these models tend to exacerbate challenges for low-income and minority applicants.

Forbes said any outcomes-based model would require an influx in new funding, but he isn't confident the Pallister government will follow suit. Manitoba post-secondary institutions have faced funding freezes, and in one year, a cut. 

Benarroch said in an interview he recognizes the trepidation over a new financing model, but he believes it can help.

"I think as you become more informed and more aware of how it works, some of that fear dissipates," he said, adding that any system should account for differences between institutions.

"You begin to realize that in places where this has been implemented and implemented well that, in fact … it can help to improve outcomes over time."

In an email, the province wouldn't discuss its meeting with the U of M, but said it would prioritize accountability in any outcomes-based funding model.

It's also reviewing the approaches in Alberta and Ontario, which haven't implemented their models yet because of the pandemic.

"The Tennessee model was established in the 1970s to fund institutions based on performance instead of enrolment numbers, and it includes easy-to-understand metrics that capture each school's uniqueness and an external review committee to ensure the metrics are fair and effective," the statement said.

"We are working to develop a model and funding metrics that best fit Manitoba's needs and will involve our seven publicly funded colleges and universities throughout the design, development and implementation process."