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Abstract

Over the last 40 years, American institutions of higher education have been encouraged to align with the private sector by policymakers, think tank experts and businessmen in order to become more efficient and more accountable. In a wider sense, this new partnership may be evidence of what has been termed “disaster capitalism.” In disaster capitalism, crises are treated as economic opportunities. Governing bodies become “hollow states” which serve only to regulate contracts and provide further opportunities to entrepreneurs. The supposed crisis of accountability in American higher education may be such an opportunity. This paper argues for the emergence of the “hollow university” in American higher education. In the hollow university, state legislatures, think tank experts, leaders from the private sector and higher education administrators help to create a climate where institutions are more amendable to private sector partnerships. In order to determine this, I examine the desired inputs, processes, outputs and outcomes of four performance-based funding policies in the United States and demonstrate how the wording of these policies allow for and encourage private sector partnerships, specifically with emerging data companies such as Civitas Learning. Implications for the public mission of universities are discussed.

Keywords

Disaster capitalism hollow university performance-based funding neoliberalism

There has been ample evidence which demonstrates that American higher education policy over the last 40 years has been influenced dramatically by the needs of business and industry (Giroux, 2011; Slaughter and Rhoades, 2004). Slaughter and Leslie (1997) termed this phenomena academic capitalism. Academic capitalism essentially holds that higher education institutions should function more like market entities, or at least quasi-market entities, by producing patents and partnering with the private sector (Rhoads and Torres, 2006; Slaughter and Leslie, 1997; Slaughter and Rhoades, 2004).

As the 21^st century progresses, new methods of academic capitalism or new methods of synchrony between the university and the private sector are emerging. Perhaps one of the most lucrative methods is the growing field of data analytics (Kim, 2014). For-profit analytics companies such as Civitas Learning are partnering with public institutions of higher education in many US states. Analytics companies provide “big data” for institutions. As the co-founders of Civitas Learning describe: “Insight analytics include a family of data science strategies that combine hindsight (e.g. data mining) and foresight (e.g. predictive modeling) to guide initiatives in teaching, learning, student support, and institutional management.” They go on to argue that this kind of data is useful in telling the stories of students in the aggregate and allowing the professors to tailor their coursework to the needs of the students (Kim, 2014).

The partnerships between institutions and the private sector is not necessarily one of rational choices, however. In a wider sense, this new partnership may also be evidence of what Naomi Klein (2007) has termed “disaster capitalism.” State policymakers many times encourage, and sometimes even mandate, this type of public/for-profit partnership. In disaster capitalism, crises are treated as an economic opportunity. Governing bodies become “hollow states” which serve only to regulate contracts and provide further opportunities to entrepreneurs (Klein, 2007). Governing bodies become conduits for businesses which claim to have the solutions to the crisis.

One specific criticism of higher education is that institutions do not do enough to graduate their students (Fried and Salam, 2012; Vedder, 2004). Institutions are charged with inefficiency, squandering of resources and indifference to student needs. Many of these critics recite woeful statistics: half of students who enroll do not finish their degrees, the student dropout rate is climbing, and so is tuition (Lambert, 2014). Partnership with the private sector is believed to make higher education institutions more efficient and cognizant of customer (student) needs (Slaughter and Rhoades, 2004; Washburn, 2005). Currently, policymakers in over 30 US states have enacted performance-based funding policies which seek to do just this (Dougherty and Reddy, 2013; Harnisch, 2011; Miao, 2012). The most recent wave of performance-based funding policies, known as PBF 2.0, which began in 2007, ties a portion of a state’s higher education base funding to institutions meeting certain goals, usually graduation rates and job placement (Dougherty and Reddy, 2013; Gorbunov, 2013; Miao, 2012). Companies like Civitas cast themselves as increasingly important to help institutions meet these mandated goals (Kim, 2014).

From an academic capitalism and disaster capitalism perspective, however, state policymakers are making higher education more amendable to private sector interventions. The “hollow state” government is creating a “hollow university” which is simply a coordination and administration apparatus for the needs of business and industry. This paper will examine the performance-based funding policies in four US states—Texas, Louisiana, Florida, and Ohio—and demonstrate how these policies have opened the door for private sector entities to “solve” the problems of higher education while making a profit. It should be noted that Civitas is not the only for-profit company that offers these services; however, they are one of the newest ones, and have emerged in the midst of this new craze for performance-based funding policies. This examination will require a brief historical contextualization of the rise of disaster capitalism and performance-based funding policies.

Disaster capitalism and the rise of accountability

While it may be somewhat of an overstatement, universities and state governments largely relied on trust during the 1950s and 1960s. Universities were trusted to give back to their constituents, and they almost always did (Burke, 2005; Newfield, 2008). This golden age of higher education came to an end by the 1970s, however, which brought with it economic recession, high inflation and unemployment (Harvey, 2005). Public higher education gradually became a target for increasingly conservative policymakers (Alexander, 2000; Giroux, 2011; Newfield, 2008). More than an economic blow, however, public higher education was targeted in the 1970s and 1980s because it was held responsible for inciting much of the perceived social turmoil of the 1960s as well as being the site of many of these protests (Alexander, 2000; Newfield, 2008; Zumeta, 2011). Many policymakers saw the huge budgets of higher education institutions as an easy target for cuts and reforms (Newfield, 2008). Performance-based funding is one such reform.

Performance-based funding for higher education grew out of the neoliberalism (Zumeta, 2011) which swept not only higher education but American political thinking as well (Harvey, 2005). For neoliberals, goals of access, equality and civic duty are largely replaced by market-driven reforms for virtually all functions of higher education (Giroux, 2011; Malott et al., 2013). The goal shifted to creating a market of individual consumers, not institutions, to create an educated citizenry. For higher education, this means closer alignment with the market, namely in the form of producing potentially profitable products, research and workforce training (Zumeta, 2011). In a wider sense, the accountability movement in general and performance-based funding in particular became a way to stifle the revolutionary and democratic potential of higher education (Giroux, 2011; Malott et al., 2013; Newfield, 2008). At the same time that policymakers are demanding more from higher education, they are cutting state appropriations. These actions serve to discipline higher education, to starve it of funds and tie the remaining funds to outcomes and performance.

Performance-based funding polices seek to reward or sanction public institutions depending on whether or not they meet specific goals, such as completion rates and Science, Technology, Engineering and Mathematics (STEM) degree targets (Dougherty and Reddy, 2013). The overall purpose of these policies is to make public institutions accountable to the economic demands of their states as well as to produce a competitive workforce to be successful in the global economy. Policies are not simply prohibitive; rather, they help to promote certain institutional and individual behaviors (Allan, 2008). Thus, in a wider sense, the purpose of performance-based funding policies is to structure higher education like a market mechanism and promote higher education institutions to act like and partner with for-profit entities (Marginson, 2007). Accountability in higher education, and the performance-based funding policies that promote it, is understood as market accountability. States fund public institutions of higher education and legislators demand to see a return on their investment in the form of measureable goals. The alleged crisis which performance-based funding policies help to promote is that higher education is no longer accountable to the taxpayers who fund it. The proposed solution to the crisis is the private sector. Klein (2007) argues that the public sector has been “shocked” with this capitalist solution. This shock doctrine has allowed for what Klein (2007) has termed corporatism, where big business and big government combine power.

Another crucial player in the hollow state–hollow university alliance is the growing power of advocacy organizations. Philanthropic organizations such as The Lumina Foundation and The Bill and Melinda Gates Foundation push a completion agenda for higher education and K-12 policy (Hall and Thomas, 2012). The Lumina and Gates foundations work closely with state legislators to craft policies for higher education; specifically performance-based funding policies (Dougherty and Reddy, 2011; Miao, 2012). The aim is to promote degree completions above all else because, as many advocates of performance-based funding repeatedly argue, the United States is quickly falling behind globally in the number of adults with degrees attained. This falling behind threatens the economic prowess of the United States in the global economy (Harnisch, 2011; Miao, 2012). In fact, the Complete College America foundation, which pushes performance-based funding, was established by the Gates Foundation for this very purpose: educating policymakers to the crisis of US lagging completion rates. More degree completions equate to more jobs and a stronger economy (Hall and Thomas, 2012). The foundation created an alliance among stakeholders to promote accountability. The “alliance” is an alliance of state governors, other state legislators, higher education officials and members of the Complete College America foundation in an effort to influence state policymaking toward performance-based funding and other outcome-based measures (Mangan, 2012).

Currently, 26 states are part of the Complete College America foundation alliance, and the four states I have chosen to study are members of the alliance. The American Legislative Exchange Council (ALEC), which is a conservative policy organization that underwrites policies for state legislators, is also active in promoting performance-based funding policies (Hall and Thomas, 2012). ALEC has been influential in pushing its neoliberal agenda across state capitols. Performance-based funding is a favored method for pursuing this neoliberal agenda because it casts institutions squarely as human capital producers while scrubbing institutions of their potential for social criticism (Giroux, 2011; Hall and Thomas, 2012; Malott et al., 2013; Newfield, 2008; Vestrich, 2008). Another organization which is pushing for performance-based funding is the National Governors Association (NGA). Taking a page from the Lumina, Gates and ALEC playbook, at the 2011 NGA annual meeting, the idea of performance-based funding and holding higher education institutions accountable to taxpayers was a major theme of the conference (National Governors Association, 2011). As a result, many governors have spearheaded the push for performance-based funding policies through their state legislatures.

The lines between government, business and philanthropy begin to blur. Public “service” now constitutes a type of “reconnaissance” mission for business (Klein, 2007) (p. 98). Policymakers, who have ties with private sector actors and representatives from philanthropic organizations, scout out opportunities for business. At the very least, these three sectors form a powerful bloc to push for their vested interests.

Performance-based funding may be such a vehicle to achieve these interests. Klein (2007) argued that the government becomes a hollow state, no longer concerned with questions of equity, but a coordinator for business. State governments become hollow states. As the literature on academic capitalism demonstrates, university governance over the last 30 years has also become a vehicle for corporate interests (Giroux, 2011; Malott et al., 2013; Rhoads and Torres, 2006; Slaughter and Rhoades, 2004). Institutional boards have become revolving doors where businessmen and CEOs increasingly shape the politics of the university, while state coordinating boards and governing boards are also increasingly staffed with corporate allies (Slaughter and Rhoades, 2004; Washburn, 2005; Zumeta, 2001). Performance-based funding may not make only the state government a hollow state, but university governance as well. The hollow university and the hollow state may further serve the needs of business.

Civitas and performance-based funding

Since the 1990s, there has been a tremendous boom in for-profit educational industries. For-profit colleges and universities have become major players in higher education deliverance. Educational software, textbooks, publishing databases and even pay-to-publish journals have emerged (Peet, 2009; Spring, 2008; Truth, 2012). One of the newest for-profit ventures is data analytics (Kim, 2014). There are a number of “big data” companies on the market. Civitas Learning, however, offers a wide range of services and flexible products which they argue will improve the functioning of higher education. This paper will only focus on Civitas Learning because Civitas is a new startup company which emerged concomitantly with the rise of PBF 2.0 in higher education.

This is not to suggest that there is a conspiracy between policymakers and businessmen, or that there is a planned effort to drive tax dollars and tuition into the for-profit sector. While certain collusions between policymakers and lobbyists certainly exist, there are many policymakers and entrepreneurs who ardently believe that for-profit collaborations will benefit higher education. And in some cases, they may even be correct. Educational policymaking is a conglomerate of interests, actors and social issues, and to suggest an overarching conspiracy would be naïve. It is blatantly obvious, however, and demonstrated by over three decades worth of literature, that educational policymaking has been dramatically influenced by private sector interests. The purpose of this paper is to understand more clearly how these interests are aligning and working to support each other. There are many companies which can be examined; however, Civitas Learning and the emergence of performance-based funding policies offer an emerging relationship.

Civitas Learning was founded in 2011. One of the founders formerly worked for the Bill and Melinda Gates Foundation. The other founder worked for Kaplan, a for-profit education company. In 2013, Civitas secured $8.75 million dollars in funding from leading venture capital firms such as Emergence Capital Partners. In 2015, Civitas secured $60 million from Warburg Pincus, an investment firm, bringing Civitas’ total up to almost $90 million in investment (Shieber, 2015). The Civitas Learning Website reads: “Higher Education institutions have never had scalable, sustainable, and strategic tools to put educational data to use.” (Civitas Learning, 2015). Civitas Learning claims that it can offer higher education institutions the ability to utilize and consolidate its data, along with many other services. Among these services Civitas offers “a ‘Degree Map’ [whose] application is an ‘immediately visual’ and ‘very handy’ way of tracking student progress, said Biegert, who leads the college’s Integrated Planning & Advising Services (IPAS) project.” Civitas Learning offers a prediction service. Data is used to predict things like graduation rates. And performance-based funding policies mandate institutions to raise their graduation rates.

A correspondent for the online publication Inside Higher Ed interviewed one of the founders shortly after the creation of Civitas. When asked if higher education is broken, the founder responded that broken may be too strong of a word. Rather, he chose to label higher education in need of assistance in adapting to the rapidly changing conditions of the knowledge economy. So, for the founder, there is a problem that is affecting higher education, and he believes that the for-profit sector can help ameliorate this problem. When asked how the for-profit sector can help, the founder stated that “We’re trying to help institutions that want to improve student success.” Specifically, the founder claimed that “For individual institutions, they typically are using more discrete measures related to their particular mission: (1) course completion, (2) year-to-year retention, (3) completion rates, and/or (4) job placement rates.” These goals are identical to the goals of almost every performance-based funding policy in the United States (Dougherty and Reddy, 2013; Miao, 2012). The founder further stated that: “I don’t know a university or college that isn’t trying to increase persistence, it’s just for several, it’s hard to know which initiative, which intervention is really moving the needle on effectively improving student retention, persistence and success.” Civitas Learning will provide data which helps tell the story of these students and help institutions improve the above four goals and others. Student success, student outcome, persistence, retention and completion rates are the buzzwords of the accountability movement in higher education (Burke, 2005; Zumeta, 2011). The founder’s statements are part of a larger national rhetoric which has helped to promote the idea that there is a crisis in higher education. This is not to say that the data provided by companies such as Civitas is a bad thing in itself, or that colleges shouldn’t aim to improve their graduation rates. The data will most likely be very useful in a number of ways. The question, however, deals with the partnership between public and for-profit entities.

When asked what role should partnerships between not-for-profits and for-profits play, the founder answered: “These kind of partnerships—like those our community colleges and universities are building with us—allow them [colleges] to maximize their available (and in some case dwindling) resources, learn together, learn what’s working, and provide students and faculty with the data and tools they need to make informed choices that result in higher successful outcomes.”

Perhaps in the most succinct summation of the hollow university, the founder stated: “Approximately 100 billion in tuition fees (in the US) are spent each year on students who will not graduate … we [Civitas] believe that there is an opportunity to improve that number by 5–10%, which is a multi-billion dollar opportunity” (Shieber, 2015). This statement hints at the enormous profitability of higher education and for-profit sector partnerships, and the hollow university in general.

A close examination of selected performance-based funding policies can begin to illuminate some of the specific channels by which the hollow state and the hollow university collude. While there are many other states with performance-based funding policies, a number of institutions in Texas, Louisiana, Florida and Ohio have partnered with Civitas Learning. These partnerships offer a glimpse into the hollow university. One way to analyze performance-based funding policies is by following Burke and Serban’s (1998) input–process–output–outcome heuristic. Policy is meant to promote certain behaviors (Allan, 2008). The input–process–output–outcome heuristic allows for the researcher to determine the desired behaviors that a policy is meant to promote and compare these with the goals and missions of companies such as Civitas Learning. Inputs had been the traditional markers of state funding, for example enrollments. A process includes how resources are allocated, such as teaching loads and measures of class size. Further, a process is how a university turns inputs into outputs. An output is the direct result of college functions, such as graduation rates. Finally, an outcome is what social value the outputs have in society. Two common examples of outcomes are an educated workforce or higher civic participation rates. While many policy behaviors align with the goals of for-profit companies, Civitas Learning is poised as an influential actor in the emerging educational market. Further, Civitas commands a growing share of contracts with many public institutions (Kim, 2014). Thus an examination of the alignment between performance-based funding policies and the goals of companies such as Civitas can give researchers insight into the blurred lines of the public and private sector, and the emerging networks of the hollow state and hollow university.

Austin Community College received a $100,000 dollar grant from the Gates Foundation (Fain, 2014). Fain (2014) explains the situation: “As is the case at many community colleges, Austin Community College’s student advisers are often too overwhelmed to help large numbers of first-generation and low-income students. The college has just 300 advisers on staff to serve its 43,000 students.” Civitas and college officials have partnered together to remedy this situation. Here, the long-range actions of neoliberalism in public policy, mainly the reduction of state funds, has helped to overwhelm public institutions and driven them into the arms of the for-profit sector. As one Civitas representative explained about the partnership: “The counselors [of community colleges] spend an inordinate amount of time gathering paperwork.” She continued: “[And Civitas helps them reduce the clutter by combining] a lot of resources that are scattered all over the place.” Fain (2014) further states: “Civitas puts the entire course catalog into its dashboards, which show how much progress students have made toward their credentials. The tools also help students change majors … without losing credits.” Civitas plans to offer apps to 1500 students so students can monitor their own progress and data. The plan is then to extend the service to all students (Fain, 2014). Civitas and Austin Community College then plan to use predictive data analysis to allow professors to better advise their students.

The ultimate purpose of the partnership is to increase graduation rates at Austin Community College. The graduation rate of Austin Community College has been the center of recent controversy. In 2011 a Texas business group put up a billboard and tried to actually shame the college to raise its graduation rate. The billboard announced that only 8% of Austin Community College’s students graduate (Fain, 2014). However, what the billboard did not say was that this number only pertained to first-time, full-time students, which account for a very small number of students at the college (Kim, 2014). The Texas business group was drawing on the “crisis” of college graduation rates. The group was inspired by messages of Complete College America and the Lumina Foundation (Fain, 2011). The Texas performance-based funding policy framework enacted in 2011, the actual appropriations for performance-based funding in 2013, and the partnership with Civitas (prompted by the $100,000 dollar grant from the Gates Foundation) are all proposed solutions to the crisis. It should also be noted that Civitas is based out of Austin Texas.

Below, the performance-based funding policies of four states are examined in order to determine how the policies provide a staging ground for companies such as Civitas.

Texas

In 2011, Texas policymakers mandated that the Texas Higher Education Coordinating Board make performance funding proposals to the legislature every biennium. The legislature is not required to adopt any of these proposals. However, in 2013, the legislature adopted a performance-based funding proposal for community colleges. The Texas legislature has attached 10% of base funding for community colleges to making progress toward performance metrics. A number of Texas community colleges have partnered with Civitas; Austin Community College, Amarillo Community College, Northeast Texas Community College, Lee College, Kilgore College and Lone Star College.

In the Texas performance-based funding policy, two inputs deal directly with securing efficient and equitable funding for higher education; see sections 1.9 and 1.13. Other inputs deal with making funding in Texas based on student success and achievement; see sections 1.2, 2.14–16, 4.8–10 and 2.10–14. The processes are varied. Two processes call for incentives to create a 5-year plan and to promote institutional diversity (1.16–17) and (1.12, 1.14–15). Three other processes deal with promoting efficiency and supporting faculty (1.12, 1.18–20) and (1.23, 2.1–2) (5.23–27, 6.1–2). Six processes deal with students meeting certain benchmarks, such as completing a certain amount of credit hours (5.8 to 5.17).

The purpose of the outputs is the awarding of bachelor degrees and certificates. For instance:

The purpose of this section is to ensure that institutions of higher education produce student outcomes that are directly aligned with states education goals and economic needs. For general academic teaching institutions other than public state colleges: the success measures considered by the board under Subsection (d) must include: the total number of bachelor’s degrees awarded by the institution (4.11–15).

The board referenced in the policy is the Texas Higher Education Coordinating Board. One of the main initiatives of the board as stated on their website is to align higher education outcomes with current and future workforce needs. The rest of the outputs and outcomes are indicative of this workforce trend. Another similar output reads: the success measures considered by the board under Subsection (d) must include: the six-year graduation rate of students of the institution (4.20–26).

The processes and outputs for community colleges are indicative of neoliberalism as well. The policymakers call for the successful completion of :

developmental education in mathematics

developmental education in English;

the first college-level mathematics course with a grade of “C” or higher

the first college-level English course with a grade of “C” or higher; and the institution;

the first 30 semester credit hours at the institution and transfer to a four-year college or university after successful completion of at least 15 semester credit hours at the institution; and

the total number of the following awarded by the

associate’s degrees;

bachelor’s degrees under Section 130.0012;

certificates identified by the board for purposes of this section as effective measures of student success.

All of the above are processes except for associate’s degrees, bachelor’s degrees and certificates, which are outputs. Civitas can help institutions predict and promote these processes and outputs. These processes and outputs also help to promote the wider outcomes of the Texas policy.

The outcomes are typical of accountability policies and help to make Texas institutions amenable to partnerships with companies such as Civitas. The first outcome reads: “The legislature finds that it is in the state’s highest public interest to evaluate student achievement at institutions of higher learning and develop higher education funding policy based on that evaluation” located in section 2.10–14. This is followed by: “Maintaining the state’s competitiveness in the national and global economy,” located in section 2.17–18. One way to maintain competitiveness is to partner with Civitas. Again, the Texas policy promotes market-like behaviors, and has made a great opportunity for partnerships with the for-profit sector. These outputs and outcomes can be met by partnering with companies such as Civitas, and Civitas has marketed themselves to do just this.

Louisiana

Civitas Learning has partnered with the University of Louisiana at Lafayette (ULL), which is a large public research institution. The Civitas website notes that ULL will use Civitas Learning to improve student learning success and enhance retention efforts in distance programs. It should be noted that a number of subsequent policies and amendments clarifying the original Louisiana performance-based funding policy have been enacted since 2010. Furthermore, the Board of Louisiana Regents will be recommending to the state legislature that the GRAD Act be repealed and a new similar act be put forth (Agenda for the December 10^th 2015 Louisiana Board of Regents Monthly Meeting). The Board of Regents wants to incorporate the performance measures and rewards into a new performance policy which will align more closely with the fiscal landscape of the state (Agenda for the December 10^th 2015 Louisiana Board of Regents Monthly Meeting). The fate of the GRAD Act remains to be seen. Nevertheless, the notion of performance funding and rewards will most likely still play a major role in higher education funding in Louisiana.

Three inputs grant Louisiana higher education institutions the autonomy to raise tuition if they meet certain performance indicators. The tuition increases apply to both resident and nonresident students, located in sections 3.20–23 and 6.1–15.

Three processes are directly linked to the notion of efficiency. These processes read: “Institutional efficiency and accountability. Eliminate remedial education course offerings and developmental study programs unless such courses or programs cannot be offered at a community college in the same geographic area (3.14–16)” and “Eliminate associate degree program offering unless such programs cannot be offered at a community college in the same geographic area or when the Board of Regents has certified educational or workforce needs (3.17–19)” and finally “… remaining competitive, increasing their effectiveness and efficiency … (1.20–21).” Not only are these processes related to efficiency, but there is a consciousness effort to raise the quality of the institution and students, as evidenced by this process: “Phase in increased admission standards and other necessary policies … (2.21).” The reduction of remedial courses may be an unintended result of performance-based funding policies and accountability in general. The push for quality and rigor and higher graduation rates may have the unintended effects of making institutions wary about remedial students, who need the most help. Even Civitas representatives admit as much. They argue that data cannot be used to make a student inferior and drive that student to drop out (Fain, 2014). However such a push from policymakers and businesses for higher graduation rates, why should institutions take a chance on a struggling student in the first place when they will be penalized for that student not graduating? Equity may be slowly traded for efficiency.

In addition, outcome metrics all must be approved by the Louisiana Board of Regents, which is the state coordinating board for higher education. The board’s master plan highlights that Louisiana higher education institutions must raise educational attainment to compete in the 21^st century knowledge economy. According to the Louisiana Board of Regents website, the overall intent of the master plan is to align Louisiana higher education institutions with the market.

Three more processes deal with collaboration: “Develop referral agreements with community colleges and technical college campuses to redirect students who fail to qualify for admission into the institution. (26–28)” and “Demonstrate collaboration in implementing the articulation and transfer requirements … 2.29–30,” and lastly “Develop partnerships with high schools to prepare students for postsecondary education (2.17–18).” Perhaps the most blatant process which aligns with the hollow state reads:

Workforce and economic development. (a) Eliminate academic program offerings that have low student completion rates as identified by the Board of Regents or are not aligned with current or strategic workforce needs of the state, region, or both as identified by the Louisiana Workforce Commission (3.1–4).

This is a noteworthy process because it allows for a reduction in certain offerings, and resources can then presumably be put to use in other offerings that are more amenable to the market and profitability. This is another indication of how the Louisiana performance-based funding is restructuring the institutional behavior of its public institutions. Offerings which do not drive the state economy presumably not drive the hollow state either, and are largely neglected.

The outputs of the Louisiana policy are typical of accountability measures. They read: “improving college completion … (1.22)” and “cohort graduation rates … (2.12)” followed by “Increase the percentage of program completers at all levels each year (2.16)” and “increasing the performance of associate degree recipients who transfer to institutions that offer academic undergraduate degrees at the baccalaureate level or higher (3.11–13).” Other outputs are: “Having a high percentage of graduates or completers each year as compared to the state average percentage of graduates and that of the institution’s peers (4.10–12)” and “Having a high level of research productivity and technology transfer (4.16)” as well as “a graduation rate of at least sixty-percent for any institution classified as a ‘Four-Year 2’ institution by the SREB (8.15–16).” This last output drives institutional behavior toward more market-like solutions, specifically partnerships with companies like Civitas. The policy also lays out what outputs are expected if institutions reach their first performance indicators:

If an institution’s initial performance agreement is renewed for a second six-year period, the institution in exchange shall: further increase cohort graduation rate goals as specified in Subparagraph (C(1)(a)) of this Section including the following, as applicable: “graduation rate of at least seventy-five percent for any institution classified as a ‘Four-Year1’ institution by the SREB (8.13–14)” and “a graduation rate of at least fifty percent for any institution classified as a ‘Four-Year 3’, ‘Four-Year 4’, or ‘Four-Year 5’, institution by the SREB (8.17–19)” and “Increase the use of technology for distance learning to expand educational offerings.”

As in the other policies, a substantial amount of funding is tied to Louisiana institutions meeting these metrics. These metrics are not simply guidelines, but directives which restructure institutional behavior for Louisiana public institutions of higher education.

Like the outputs, the outcomes are also typical of other performance-based funding policies. The outcomes center mainly on preparing a workforce that can meet the state’s workforce and economic needs. The outcomes listed are: “meeting the state’s current and future workforce and economic development needs … (2.1–2),” as well as “graduation productivity goals that are consistent with institutional peers … (2.12–13),” and “Increase passage rates on licensure and certification exams and workforce foundational skills (2.19–20),” and “Increase research productivity especially in key economic development industries and technology transfer at institutions to levels consistent with the institution’s peers (3.7–9),” and finally “To the extent that information can be obtained, demonstrate progress in increasing the number of students placed in jobs … (3.10–12).” There is also a push to encourage public–private partnerships and to align colleges with business and market needs: “Offering a specialized program that involves partnerships between the institution and business and industry, national laboratories, research centers and other institutions (4.4–6).” This outcome blatantly states the desire of the Louisiana policymakers to make higher education institutions align with the market, and by partnering with Civitas, Louisiana institutions have followed through this desire. Another outcome reads: “Aligning with current and strategic statewide and regional workforce needs as identified by the Louisiana Workforce Commission and Louisiana Economic Development (4.7–9).” These outcomes show how Louisiana policymakers have used policy to restructure and direct institutional behavior toward partnerships with for-profit companies. The hollow state and the hollow university offer opportunities which businesses like Civitas can take advantage of.

Florida

In 2013, Florida passed a performance-based funding-type policy specific to IT degrees and graduates. This was a grant program where specific types of universities only were eligible and had to apply. In its 2015 state appropriations bill, the Florida legislature passed its actual performance-based funding policy through the 2016–2017 fiscal year which applies to all universities. The funding of performance-based funding in Florida, according to the National Conference of State Legislatures website, consists of new money and base funds. This paper examines the 2015 policy.

However, the policy is extremely brief, so I also looked at the paper Board of Governor’s Performance Funding Overview Model which is posted on the Florida Board of Governor’s website (Florida Board of Governors, 2015). Six public Florida institutions have partnered with Civitas: University of Central Florida, Valencia College, University of Southern Florida, Florida International University, Jackson State University and St. Petersburg College. Specifically, in 2014, the Civitas website noted that the University of South Florida will use Civitas to dive deeper into its analytics work to further improve graduation and retention rates.

The inputs in the 2015 policy mainly centered on the funds that the legislature can withhold from institutions that do not meet their performance goals. From section 1494 to 1512, the policy states that if an institution does not meet its targets, it must submit an improvement plan, after which the institution’s progress will be monitored. The institutions must submit monitoring reports. The Commissioner of Education determines if the institutions receive their funds. So, at least according to the text of policy, the stakes for not meeting performance metrics can be high. (However, the funding attached to meeting performance-based funding metrics is still low in Florida.)

The processes of the 2015 policy were similar to the metrics of most performance-based funding policies. Some of these processes were: increased retention rates (line 1476) and an improvement plan if universities missed their targets (line 1497). The 2015 policy has similar outputs to other performance-based funding policies; beginning on line 1475, the outputs listed are: program completion and graduation rates. The 2015 policy also enumerated four outcomes, beginning on line 1477: job placement, post-graduation employment, salaries and further education.

The “Board of Governor’s Performance Funding Overview Model,” published on the Florida Board of Governor’s homepage, also helps to break down some of the processes and outputs of the performance-based funding policy. According to the Florida Board of Governor’s website there are 10 common metrics which all university are measured on (Florida Board of Governors, 2015). These metrics are:

Percent of Bachelor's Graduates Employed

Average Wages of Employed Baccalaureate Graduates

Cost per Undergraduate Degree

Six-Year Graduation Rate (Full-time and Part-time FTIC)

Academic Progress Rate (2nd Year Retention)

Bachelor's Degrees Awarded in Areas of Strategic Emphasis (includes STEM)

University Access Rate (Percent of Undergraduates with a Pell Grant)

8a. Graduate Degrees Awarded in Areas of Strategic Emphasis (includes STEM) (NCF Excluded) 8b. Freshman in Top 10% of Graduating High School Class (NCF Alternative Metric)

Board of Governors Choice

Board of Trustees Choice (all metrics were taken from the “Board of Governor’s Performance Funding overview model” on the Florida Board of Governors website)

Metrics 1–2 are outcomes, metrics 4, 6 and 8a are outputs, and metrics 3, 7, 8b are processes. Like Texas and Louisiana, the Florida policies have inputs, processes, outputs and outcomes reminiscent of neoliberalism. The policies in Florida, like Texas and Louisiana, tie funds for Florida institutions to meeting performance metrics. As the 2015 state appropriations bill makes clear, Florida institutions can lose funding if they do not meet performance metrics, thus there is some pressure on institutions meeting performance metrics. It should be noted that performance funding in Florida is small in scope right now. Inside Higher Ed reports that roughly 3% of funding is tied to performance incentives. Yet, as the article from Inside Higher Ed makes clear:

Advocate or critic of the system, all agree on one thing: performance-based funding certainly has the attention of the universities, which are adopting strategies to try to be successful according to the standards laid out in the system. (Mulhere, 2015)

One strategy to be successful in the system laid out by Florida policymakers may be partnerships with companies like Civitas Learning.

Ohio

The state of Ohio has one of the most aggressive performance-based funding policies. According to the National Conference of State Legislatures website, 80% of funds for four-year institutions are tied to performance initiatives and 50% of funds for community colleges are tied to performance initiatives. Currently, two community colleges in Ohio, Sinclair Community College and Lorain County Community College, and one four-year university, Cleveland State University, have partnered with Civitas. This is according to the Civitas website. In 2014, the website noted that Lorain County Community College will use Civitas to expand is Completion by Design work with the Bill and Melinda Gates Foundation.

In 2010 Ohio enacted its performance-based funding policy. In 2014, HB 484 was passed, which advanced revisions to the original performance-based funding policy. This paper looks at the 2014 policy because HB 484 specifically revised the funding formula for community colleges and technical colleges. It also required the Chancellor to evaluate the current performance-based funding for all institutions of higher education and make a report for new recommendations to the Governor and general Assembly by 31 December 2014. The Ohio policy was not solely dedicated to performance funding, however. Rather, the policy dealt with a number of higher education issues and the performance initiatives were intertwined throughout the policy.

The Section 363.190, titled “State Share Of Instruction Formulas” dealt directly with performance initiatives:

The Chancellor of the Board of Regents shall establish procedures to allocate the foregoing appropriation item 235501, State Share of Instruction, based on the formulas in this section that utilize enrollment, course completion, degree attainment, and student achievement factors reported annually by each state institution of higher education participating in the higher education information system.

The Higher Education Information System is a database where Ohio institutions submit annual data. This section makes clear the usual processes and outputs of performance-based funding policies, specifically, course completion (process), degree attainment (output) and student achievement factors (process). There were other sections that dealt with performance initiatives. One output for community colleges read:

Completion milestones shall include associate degrees, certificates over 30 credit hours approved by the Board of Regents, and students transferring to any four year institution with at least 12 credit hours earned at that community college, state community college or technical college.

Toward the end of the policy, in section 7, the Chancellor of Education is required to make a report to the legislature. One of the key tenets of the report is graduation rates.

The report also shall include each state institution’s graduation rate compared to the institution's expected graduation rate.

This report was due on 31 December 2014. In this 20-page report, the Chancellor detailed how each universities actual graduation rate compared with its expected graduation rate. Graduation rates are the main outputs of the policy.

In summation, community colleges are funded on completion milestones such as associate degrees awarded, certificates awarded and student transfers with 12 credits to four-year universities. Community Colleges also receive success points for students achieving certain successes, such as course completions. Four-year universities are funded mainly degree completions and course completions (National Conference of State Legislatures website, 2015). In addition, institutions are awarded more points for students who receive the Pell Grant or who are from traditionally underrepresented groups who achieve completion milestones.

Again, this policy deals with more than performance funding, but the processes and outputs delineated in the policy are similar to the other policies studied, and seem to make partnerships with companies such as Civitas more attractive.

Conclusions

The above analysis, while small in scope, does begin to shed light on the emerging phenomena of the hollow university. There is a word caution, however. Just because a policy mandates an action does not mean that these actions are carried out exactly as the policy states. Funding priorities changes, stakeholders change, new stakeholders require different things, legislatures change political make up, etc. In addition, even when a policy mandates something, it still may not pan out the way it was intended (i.e. the ability for Louisiana to raise its tuition, despite being granted in the GRAD Act, was not as clear cut as it seemed to be in the policy). In an effort to validate the figures I have used regarding funding I have relied on multiple sources, beginning with the National Conference of State Legislatures website, and utilizing news reports and policy memos. I have also spoken with representatives from state policy organizations in Louisiana, Texas, Florida and Ohio to verify funding and other issues in the policies if they were not specifically clear (although I did not hear back from anyone in the Florida agency regarding if the 3% funding figure was accurate. This figure was reported in Inside Higher Ed and the NCSL website listed the total PBF funds at $200 million). Nevertheless, those doing future research would be wise to inquire into the policy situations in each state as time goes on. Further, there are not many specifics of how universities will use Civitas or how they will pay for Civitas’ services. Rather, the Civitas website lists each of the institutions examined in this article as strategic partners. Further, each institution examined in this article is a public institution which receives money from the state. Thus, all we can say for now is that each institution in the article received state funds and each institution has partnered with Civitas in some fashion.

It should also be noted that a look at the strategic partners on the Civitas website illustrates that a number of universities in the US have partnered with Civitas. Some universities that have partnered with Civitas and that are in states with performance-based funding are: The University of Arizona, Oklahoma University and City Colleges of Chicago, to name a few. It should also be noted that many institutions across the US have partnered with Civitas that are not in states with performance-based funding. Further, many institutions, which are in states that have performance-based funding policies, have not partnered with Civitas. Thus, states enacting performance-based funding policies do not automatically cause an institution to partner with a company like Civitas.

Despite these limitations and cautions, each state’s performance-based funding policy analyzed above indicates that the desired behaviors align with the goals of Civitas Learning. Civitas Learning can help institutions predict retention, graduation and even workforce placement rates. State legislators in each of the examined states have given a gift to educational technology companies as well as a reason for new companies to start up. State policymakers, coordinating and governing boards, philanthropic organizations and now, to some degree, private sector actors such as Civitas largely determine higher education policy, and they determine it largely in their own interests. This is not to imply there is a collusion or deliberate conspiracy between policymakers and for-profit companies like Civitas. Rather, there seems to be a synergy between the two. The ultimate outputs and outcomes of all the policies are financial in nature: they are meant to foster economic growth and revenue enhancement. This is indicative of the hollow state (Klein, 2007). The policies serve in many ways as a staging ground, an open door, for for-profit companies such as Civitas to come in and influence higher education. The neoliberal outcomes and outputs earnestly desired by policy makers provide a fecund opportunity for entrepreneurs and for-profit companies such as Civitas.

I have argued that higher education is becoming a hollow university, a staging ground for corporate interests. This study, again, while small in scope, did point to some ways in which this might be occurring. The values of a hollow university would be presumably much different from the values of a traditional higher education institution which seeks to promote democracy, diversity and humanism. In contrast, the hollow state (and hollow university by extension) is predicated on profit (Klein, 2007). However, I do not mean to imply that all for-profit partnerships are negative. The reality of the matter is that higher education institutions and for-profit partnerships will most likely continue to increase. Many times for-profit companies will be able to deliver services to higher education in an efficient manner. Nevertheless, the synergy and connection between policies and for-profit interests, which is the essence of the hollow state, should be continually examined more closely by future researchers in order to determine how for-profit partnerships will affect the missions and operation of public universities.

Footnotes

Declaration of conflicting interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

Angelo J Letizia is an assistant professor of Graduate Education at Newman University in Wichita Kansas. His research interests include public policy, neoliberalism and the public good.

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