ROBERT SIEGEL, HOST:
From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.
LYNN NEARY, HOST:
And I'm Lynn Neary.
When it comes to public colleges and universities, more students generally mean more money. States fund schools based on how many students they enroll. But economic pressures are changing that, as states consider the bottom line.
NPR's Larry Abramson went to Tennessee, and brought us this story on efforts to peg funding to the number of students who actually graduate with a degree.
LARRY ABRAMSON, BYLINE: The food court at Tennessee Technology University, in Cookeville, is bright and airy. Students can pick which music video they want to watch while they eat. It isn't hard to lure students to colleges like this one. What's difficult is getting them to graduate. Only about half the students at Tennessee Tech will get a degree within six years from this school. The rest will transfer or drop out.
Until now, Tennessee Tech had no financial incentive to do anything about that, says Richard Rhoda, executive director of the state Higher Education Commission.
DR. RICHARD RHODA: The old model was built at a time when resources were more available; the incentive was out there for the institutions to grow.
ABRAMSON: As budgets grow tighter, Tennessee is realizing it needs better returns from its investment in education. So last year, the state passed the Complete College Tennessee Act. College funding will rise and fall depending mostly on the number of students who graduate. Tennessee Tech's $35 million in state funding this year will go up, or down, based solely on whether students are succeeding. The initiative is only about a year old, but it's already getting attention where it matters.
This used to be the library at Tennessee Tech. But the school decided that many of the books could go elsewhere. It was more important to renovate the space and turn it into an inviting learning commons. Now, it's full of students working together at tables.
DR. PAUL SEMMES: It is much more flexible in its use, and I think student traffic is up considerably.
ABRAMSON: Paul Semmes, dean of the College of Arts and Sciences, shows me around. The school hopes that the buzz of conversation here is about classwork, and that students in the Pi Square math zone are collaborating on math. It's a way of keeping students at this engineering and technical school from becoming isolated.
SEMMES: And even though the library is not as quiet as perhaps it was before, they're getting things done.
ABRAMSON: Like working on projects, which has been shown to keep students engaged and in school. Now, Paul Semmes says, faculty have always talked about ways to help students succeed. But the new funding formula has made that goal a top priority.
SEMMES: We know it's important. We have always known it's important. And a lot of the things that we are doing in response are things that we had started before, because they knew that it would be helpful.
ABRAMSON: The higher-ed commission says the funding formula has already resulted in more discussion among colleges about ways to help students complete their degrees.
Tennessee Tech has also built classrooms that encourage collaborative learning. And the school is picking up on research that says it makes sense to blend learning and living. All dorms are being turned into learning and living villages.
Andrew Smith teaches English but instead of holding office hours across campus, he now meets students in this dorm, known as Tree House.
ANDREW SMITH: Before we had learning villages, we didn't mingle very much. This is where the students lived. And if they wanted to see me, they came to my office on the academic side of campus. And I wouldn't usually come over here. I wouldn't have business over here.
ABRAMSON: Tree House is focused on environmental issues. Smith organizes discussion topics and field trips centered on that theme.
SMITH: The research shows that faculty-student interaction outside of the classroom that is meaningful and substantive, changes lives, helps students succeed in the real world.
ABRAMSON: Now, Tennessee and other states have experimented with performance-based funding before, but many experts say there simply wasn't enough money at stake for schools to make big changes.
David Wright, with the higher-ed commission, hopes that with all funding tied to student success, schools will find it very expensive to ignore the issue.
DR. DAVID WRIGHT: The funding formula itself provides incentive for campus leaders to take a hard look at which programs are being productive and which ones are not, and say maybe it's not in our best interest to be in the business of this program anymore, at this school.
ABRAMSON: Tennessee Tech has already seen a slight boost in funding because of improvements in student performance. But it will take time to show whether these new programs can make a major dent in college dropout rates.
Larry Abramson, NPR News.
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