�Higher Education Funding Redesign Project�

SEPTEMBER 2025

Making Washington a better place to live, work and do business

Vision

• Design, gain buy-in for and implement a higher education funding model that drives increased credential production in high-demand fields, prioritizes historically underserved students, ensures strong returns on investment for both students and the state, and provides sustainable, equity-driven funding for higher education institutions.

Goals

• Create a process with employers, postsecondary leaders, and other education and workforce stakeholders to explore higher education funding model re-design in WA
• Build a common understanding of the current state of WA higher education funding and national approaches to higher education funding model redesign
• Develop a high-quality higher education funding model recommendation that has support from WRT and EAG members
• Build and implement an advocacy approach for the 2027 legislative

2

Washington Roundtable Project Goals

3

Kerri Schroeder

JPMorgan Chase & Co

Chair of EAG

Vanessa Ponce

Washington Student Association

Drew Hansen

WA State Senate,

23rd LD

Dr. Ivan Harrell

Tacoma Community College

Heather Hudson

Governor Ferguson

Mike Meotti Washington Student Achievement Council

Chris Bailey

State Board for Community & Technical Colleges

Bill Lyne

United Faculty of Washington State & WWU

Dr. Carli Schiffner

Grays Harbor College

Jeff Vincent Washington Student Achievement Council

Dr. Jim Wohlpart

Central Washington University

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Dr. Sabah Randhawa Western Washington University

Julia Reed

WA State House of Representatives,

36th LD

Dr. Amy Morrison

Lake Washington Institute of Technology

Dr. Bob Mohrbacher Centralia College

Dr. Elizabeth Cantwell

Washington State University

Dr. Robert Jones

University of Washington

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Executive Advisory Group

4

• Sara Garrettson
• Brian Jeffries
• Steve Mullin
• Neil Strege

Washington Roundtable

Kinetic West

Research Work Group

• Avery
• Marc Casale
• Casey White

• Melissa Beard, Council of Presidents
• Dr. Victoria Ichungwa, Tacoma CC
• Jason Jones, CWU
• Summer Kenneson, SBCTC
• Dr. Daniel Oliver, WSAC
• Paul Weed, EWU
• Stephanie Winner, SBCTC

Additional Experts & Support

• WA OFM & LEAP offices
• Lumina Foundation
• Arnold Ventures
• Ascendium Education Philanthropy

HCM Strategists

• William Carroll
• Tom Allison
• Katie Lynne Morton

Project Support & Research

5

Q1

Q2

Q3

Q2

Q1

Q4

Q3

Q4

Q1

Level Setting

WA HE Funding Basics & Typical Funding Model Components

April 1

Detailed Landscape

National Funding Model Landscape Research & Guiding Principles Dev.

June 3

Model Framework

Gather Feedback on Funding Model Framework

September 16

Socialization of Research & Guiding Principles

Begin Drafting Funding Model

1st Draft Funding Model

Gather Initial Feedback on First Draft Funding Model

November 4

Running Forecasts & Funding Scenarios

Fine Tuning Model

Final Funding Model

2^nd Draft Funding Model

Launch Advocacy

Advocacy Continues in Legislative Session

Q2

2025

2026

2027

Project Timeline

Running Forecasts & Funding Scenarios

Socialization of Funding Model

Socialization of Funding Model

Roadshow

Today’s Meeting!

Washington’s higher education system plays an essential role in training our future workforce and we believe sustained investment with accountability is critical to achieving our 70% postsecondary attainment goal and meeting workforce needs.

The following Guiding Principles will drive development of our funding model:

• Advances Student Outcomes: Drives student outcomes so that more students enter the workforce with a credential, improving the return on investment for students and Washington state.
• Promotes Equity: Prioritizes student needs and increases access and success by resourcing institutions to better support historically underserved students.
• Enables Transparency: Provides clarity to policymakers, institutions, students, and the public on how funds are allocated—enabling more effective planning and building confidence in the value, stewardship, and accountability of Washington’s higher education system.
• Aligns Pathways & Workforce: Improves pathway alignment and transitions for students between K-12, postsecondary (CTCs & Baccalaureate Institutions), and the workforce.
• Honors Institutional Missions: Recognizes that Washington’s institutions serve different student populations, geographies, and roles, and values these unique contributions.
• Supports Fiscal Sustainability: Plans intentionally for the transition to a new model, creates stability year to year for state and institution budgeting, and brings sustainable funds to colleges to achieve student success goals.

​

6

Guiding Principles

Executive Advisory Group and Roadshow

• Research is mixed on effectiveness of performance-based funding, but a rational model with proper weights could incentivize student success and rationalize larger investments from legislature
• Importance of recognizing varying institutional missions
• General support for proceeding with the project

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Roundtable Education Committee

• General need to prioritize investment in higher education
• Support for workforce alignment but have concern with adapting industrial policy

​

Research Work Group

• Emphasis on recognizing mission and institutional improvement
• Concerns over employment metrics
• Importance of aligning data definitions with existing dashboards and reporting

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7

Socialization: Feedback We’ve Heard So Far

Level Setting: State Funds and Tuition by Sector

$0B

$1B

$2B

$3B

Funding [USD B]

1990

1995

2000

2005

2010

2015

2020

2025

Tuition and Fees CAGR

Overall: +7.0%

1990 – 2013: +9.9%

2014 – 2025: +2.3%

State Funds CAGR

Overall: +2.8%

1990 – 2013: 0%

2014 – 2025: +7.6%

$0.6B

$2.5B

+4.2%

0

1

2

3

Funding [USD B]

1990

1995

2000

2005

2010

2015

2020

2025

Tuition and Fees CAGR

Overall: +6.1%

1990 – 2013: +9.0%

2014 – 2025: +0.4%

State Funds CAGR

Overall: +4.1%

1990 – 2013: +2.9%

2014 – 2025: +6.4%

$0.3B

$1.6B

+4.5%

Notes:

• Not adjusted for inflation. State funds do not include accounts related to capital (i.e., construction, building, or facility maintenance), all other sources included
• State-based financial aid is captured within Tuition and Fees (to be validated with OFM)

Source: Legislative Evaluation and Accountability Program (LEAP) Committee’s “Higher Education Historical Data Report,” Updated May 2024

Level Setting: State Funds and Tuition per FTE

$0

$25

Funding per FTE [USD K], Constant 2024 Dollars

7.1�(38%)

11.5�(62%)

2005

12.9�(66%)

6.6�(34%)

2015

11.8�(50%)

12.0�(50%)

2024

Tuition and Fees

State Funds

18.6

19.5

23.8

$0

$25

Funding per FTE [USD K], Constant 2024 Dollars

2.3�(27%)

6.0�(73%)

2005

3.3�(37%)

5.6�(63%)

2015

3.6�(24%)

11.3�(76%)

2024

Tuition and Fees

State Funds

8.3

8.8

14.9

Notes:

• Adjusted for inflation. State funds do not include accounts related to capital (i.e., construction, building, or facility maintenance), all other sources included
• State-based financial aid is captured within Tuition and Fees (to be validated with OFM)

Source: Legislative Evaluation and Accountability Program (LEAP) Committee’s “Higher Education Historical Data Report,” Updated May 2024

No connection between enrollment and state funds

1.3

1.4

1.5

1.6

1.7

1.8

1.9

2.0

2.1

2.2

2.3

2.4

170k

175k

180k

185k

190k

195k

200k

205k

210k

215k

220k

225k

230k

235k

240k

245k

250k

255k

260k

270k

265k

Enrollment FTE

1995

2000

Funding [USD B], Constant 2024 Dollars

2010

2015

2020

2025

2005

Enrollment

State Funds in Constant 2024 Dollars

Currently state appropriations have no direct connection to FTE enrollment (or other outcomes like persistence, completion, and high demand degree production)

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From 1995-2008 there was some alignment, with enrollments and state funds generally increasing

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After 2008, this alignment is no longer observed

• 2009-2011 – Enrollments increased, and state funds decreased
• 2013-2024 – Enrollment decreasing and state funds increasing

Notes: Adjusted for inflation. FTE enrollment includes students taking undergraduate and graduate level courses. State funds do not include accounts related to capital (i.e., construction, building, or facility maintenance), all other sources included

Source: Legislative Evaluation and Accountability Program (LEAP) Committee’s “Higher Education Historical Data Report,” Updated May 2024

Differences across institutions

4

6

8

10

12

14

16

18

20

22

24

State Funds per FTE [USD K], Constant 2024 Dollars

2012

2015

2020

2025

University of Washington

Washington State University

Eastern Washington University

Central Washington University

The Evergreen State College

Western Washington University

Community/Technical College System

Current funding approach creates differences across institutions and a perceived disincentive to grow enrollment

2024 State Funds per FTE

• The Evergreen State College ($20,000)
• Washington State University ($14,000)
• Eastern Washington University ($13,500)
• University of Washington ($11,300)
• Community/Technical Colleges ($11,300)
• Central Washington University ($11,200)
• Western Washington University ($9,700)

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Notes: Adjusted for inflation. State funds do not include accounts related to capital (i.e., construction, building, or facility maintenance), all other sources included

Source: Legislative Evaluation and Accountability Program (LEAP) Committee’s “Higher Education Historical Data Report,” Updated May 2024

Funding Model Framework

Overview�

Two Questions for Discussion

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• Any clarifying questions about the Draft Framework?
• Are there other metrics that we should consider?

HCM STRATEGISTS

State Finance Policy Addresses Three Decisions

HCM STRATEGISTS

14

State Appropriation

SBCTC

Colleges

State Appropriation

Universities

SBCTC Formula

Status Quo

No Formula

HCM STRATEGISTS

15

Draft Framework for Washington

O+M/ Core Costs

• Adequacy target
• See Adequacy and Sector Split slides for more detail
• Minimum amount per institution
• Ex. SBCTC’s Minimum Operating Allocation (MOA):

$3.7 million per campus

• Hold harmless provisions
• Adjustments for mission: Research, Size, Geography
• Parity in $/student between institutions
• MI and OK provide extra support to colleges below certain $/FTE levels

HCM STRATEGISTS

16

EAG Guiding Principle: Supports Fiscal Sustainability: Plans intentionally for the transition to a new model, creates stability year to year for state and institution budgeting, and brings sustainable funds to colleges to achieve student success goals.

Enrollment

• Directs resources to where the students are.
• 30 states incorporate enrollment in their four-year formula (all in combination with other inputs).
• Washington has low enrollment rates and negative net student migration.
• What gets counted:

HCM STRATEGISTS

17

EAG Guiding Principle: Supports Fiscal Sustainability: Plans intentionally for the transition to a new model, creates stability year to year for state and institution budgeting, and brings sustainable funds to colleges to achieve student success goals.

• Residency
• FTE
• Headcount
• Level

• Pell/WCG
• Underrepresented minority students
• Rural students
• Students from disadvantaged high schools

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Retention & Success

• North Star of the project is to drive increased credential production. WA Roundtable has a 70% attainment goal.
• Can create incentives for institutions to prioritize student success.
• 31 states incorporate performance of some sort.
• Linking funding to production of degrees can help gain support for funding increases.
• What gets counted:

HCM STRATEGISTS

18

Guiding Principle: Advances Student Outcomes: Drives student outcomes so that more students enter the workforce with a credential, improving the return on investment for students and Washington state.

• Retention
• Credit thresholds

​

• Transfer w/ minimum # credits (award not required)
• Completions by degree level

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Opportunity

• Equity in opportunity: Completions by priority populations
• Additional emphasis to incent closing of gaps.
• Economic opportunity: Workforce outcome metrics
• Only a handful of states have significantly incorporated workforce outcomes into funding formulas.
• There are significant blind spots in the data
• Opportunities to improve data collection and workforce alignment
• What gets counted:

HCM STRATEGISTS

19

Guiding Principle: Aligns Pathways & Workforce: Improves pathway alignment and transitions for students between K-12, postsecondary (CTCs & Baccalaureate Institutions), and the workforce.

• Completions by

priority population

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• Employment count
• Median income

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