Foreword
 
Executive Summary
 
Introduction
 
A National Look at Regional Grade Averages
 
Report Card Ration and Regional Average Analysis
 
A National Look at State Input Effects on the Grades In Measuring Up 2000
 
Individual State Analysis: The Example of New Mexico
 
Appendices
 
About the Author
 
About the National Center for Public Policy and Higher Education
 

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Page 7 of 10

Individual State Analysis: The Example of New Mexico

National and regional comparisons have been given across report card categories, derived ratios and state inputs. This section presents an example of a state analysis using New Mexico. New Mexico will be compared to its own region and the nation across report card grades, the ratios, and state inputs. Additional commentary or comparisons with other states or regions will be made where applicable or when certain contrasts surface that may be useful for policy consideration.

STATE ANALYSIS

In Section I, a national look at regional trends across report card categories was presented. Each individual state was represented in each graphic in Section I by individual data points, but the data points did not have the associated state labels. The graphics are reproduced in this section with New Mexico indicated.

 

New Mexico's Preparation Compared by Region

New Mexico's performance on preparation is shown in Figure 8. The state's placement on the graphic can be compared to its region and other regions across the nation. New Mexico's performance on preparation is the lowest in the Western region and the second lowest in the entire country. The state's preparation grade score of 62 was 16 points below the national average.

 

 

New Mexico's Participation Compared by Region

New Mexico's performance on participation is shown in Figure 9. The state's placement on the graphic can be compared to its region and other regions across the nation. New Mexico's performance in participation is second best in the Western region and very competitive compared to states across other regions. The Western region's participation average was below the national average, but New Mexico's participation grade exceeded the national average by five points.

 

New Mexico's Affordability Compared by Region

New Mexico's performance on affordability is shown in Figure 10. The state's placement on the graphic can be compared to its region and other regions across the nation. The Western and Northcentral regions had the strongest performance on affordability, and New Mexico was above every regional average. New Mexico's affordability grade index score of 84 places it 10 points above the national average.

 

New Mexico's Completion Compared by Region

New Mexico's performance on completion is shown in Figure 11. As with preparation, the state's performance on completion is among the lowest in the nation. The Western region's average completion grade is 10 points below the national average, but New Mexico's completion grade is 19 points below the national average. The biggest performance gap between New Mexico and its region was in the area of preparation, but the biggest difference between New Mexico and the nation was in the area of completion. On both preparation and completion, New Mexico substantially underperforms compared to both regional and national data.

 

New Mexico's Benefits Compared by Region

New Mexico's performance on benefits is shown in Figure 12. The state's placement on the graphic can be compared to its region and other regions across the nation. The Western and Northeastern regions had the strongest performance on benefits, but New Mexico was below the national and Western regional averages for the benefits category. It did not lag behind the national average or its regional average for this category to the extent that it lagged for preparation and completion, however.

New Mexico's Report Card Comparisons Summary

Table 8 summarizes in tabular form New Mexico's report card performance compared to its region and the nation.

The comparative summary of data can lead to several conclusions regarding New Mexico's higher education. First, it is clear that the state is substantially underperforming in preparation and completion, compared to regional and national averages. New Mexico is also underperforming in the benefits category, but the smaller gap between the state's performance on benefits and the regional and national averages is worthy of mention. A likely explanation emerges from the correlation results. Preparation and completion are significantly correlated. Thus, we would generally expect poor state performance on completion if a state scored low on preparation. In addition, both preparation and completion are positively related to benefits, but only the relationship between preparation and benefits is statistically significant. Participation, however, is also significantly related to benefits. It appears that New Mexico's strong performance on participation is yielding some benefits to the state, and to some degree moderating the negative effect on the benefits score that we would expect because of low preparation.

One observation to be made from the New Mexico performance data is that there is not a balance between preparation and participation. And because both preparation and participation are significantly related to completion and benefits, one strategy for New Mexico would be to more fully address preparation issues as a priority while holding participation constant. New Mexico might still be able to maintain or even increase participation and completion, as students become more qualified to enroll in higher education.

The next two sections will probe the report card categories still further. The intent is to begin to get at possible repercussions, tradeoffs or points of synergy that surface from focusing on preparation over other report card categories. This will be done by drawing on the ratio and state input analyses.

NEW MEXICO COMPARATIVE RATIO ANALYSIS

The comparative ratio analysis for indicators developed and discussed in Section II provides further clues as to New Mexico's position regarding preparation, participation and completion, as well as suggestions for possible areas of emphasis. Table 9 compares New Mexico to both the Western region and the nation across all the ratios developed in Section II. A simultaneous view of multiple ratios is more revealing than individual discussion of the ratios. Regional and national averages for the ratios were calculated and are presented in the table for comparative purposes.

Individually and cumulatively, the ratios in Table 9 offer a profile of New Mexico that speaks to both state and institutional efforts. The report card grades and the ratios would indicate that the state appears to be adequately fulfilling its function to make higher educational opportunities affordable, but that something within the higher education system is a source of difficulty.

Considering affordability, we know that the measure directly involves the state, as the subcategories of affordability include such indicators as state aid to low-income families. We also assume that affordability is partially a function of the state's appropriation investment in higher education, since appropriations presumably affect tuition and fees.

New Mexico's affordability grade score of 84 is well above the national average. But the ratio completion/affordability does not point to affordability as the problem; it points to completion. The state scores significantly below the national average of 1.07 on completion, meaning that New Mexico higher education is not completing as many graduates as the national average, given its respectable levels of affordability. Even as measured by the ratio participation/affordability, we find that, compared to the nation, affordability in New Mexico is so generous that participation is too low. New Mexico already has strong participation, but given affordability levels, we expect participation to be even greater than it is relative to the national average for this ratio. Both ratios involving affordability, along with the affordability grade itself, thus far indicate that the state is adequately funding higher education. The other ratios must be examined to gather additional clues.

The preparation ratios also provide insight. Only one other state in the entire nation, Alabama, has a higher participation/preparation ratio value than New Mexico. This means that higher education in such states as Alabama and New Mexico face greater challenges than the average state, because a large part of their enrollments are comprised of students who are not ready for postsecondary work but are participants in the institutions. One could reason that New Mexico institutions fare so poorly in completion because of the number of unprepared students they allow to participate. Moreover, the completion/preparation ratio adds another piece of information. Ideally, higher education should complete every student who is prepared. New Mexico falls below the national average of 1.02, which means New Mexico institutions are having difficulty completing even those who are prepared. New Mexico higher education, by this measure, is not adding value. This result somewhat overshadows the rationalization that completion rates are low because of low preparation. It points to the institutions themselves as the source of completion problems.

It is important here to note the individual grades for completion and preparation, since New Mexico's completion/preparation ratio does not substantially deviate from the national average. Both the preparation and completion grades are very low. Thus, even if New Mexico's ratio were to exceed the national average, the grades in the separate categories are sufficiently low that they demand attention.

If we look at New Mexico's preparation and participation ratios simultaneously, Alabama again provides a good basis for comparison, because Alabama shares some contextual similarities with New Mexico. Like New Mexico, Alabama has a very low preparation grade but provides participation opportunities beyond what one would expect given the level of preparation (participation/preparation). Both New Mexico's and Alabama's higher education allow students to participate who are not prepared. Yet, Alabama's completion grade is much higher than New Mexico's completion grade, and Alabama's completion/preparation ratio is significantly higher than New Mexico's. The interpretation is that Alabama higher education is somehow able to transform the input of unprepared participants into college graduates, whereas New Mexico is not. The National Center's Measuring Up 2000 report further states that in both Alabama and New Mexico, the percentage of young adults going to college is relatively small, while the percentage of working age adults attending is large. In addition, Alabama, like New Mexico, has a higher than average number of children in poverty and a lower than average income per capita.

It is possible that factors not considered in this analysis are affecting Alabama's success on this ratio relative to New Mexico. For example, according to Net Migration numbers in Measuring Up 2000, Alabama is importing students. This may mean that in-state residents are being left out at the expense of out-of-state students. These out-of-state students may be more successful at completing, which would inflate the completion category for Alabama. Such alternative explanations probably require additional investigation.

Numerous factors may be impacting differences of performance between Alabama and New Mexico, but the similarities between the two provide a useful basis for comparison. No two states are ever going to be completely comparable, but these comparisons illustrate how we can use information about similar states to inform our interpretations of a given state's performance.

NEW MEXICO STATE INPUT ANALYSIS

The analysis of New Mexico for state inputs compared to the nation and Western region is the last piece of evidence considered before final recommendations are made for the state. Table 10 shows New Mexico state input comparative data.

From the analysis in Section III, the general indication was that states that slightly favor aid in the aid/appropriations ratio seem to attain the most successful total average performance on participation, affordability, and completion. New Mexico's aid/appropriations ratio of 5.40 is above the national average, yet the state is in the third quintile for total average performance on participation, affordability, and completion.

New Mexico's mixture of aid/appropriations seems to be working in terms of affordability and participation, but not for completion. It would appear that New Mexico has a reasonable mix of aid to appropriations, compared with other states. In fact, Halstead (1997) calculates that given its tax revenues, New Mexico has supported higher education to a greater extent than other states. In 1991, the percent of total state tax revenues going to higher education in New Mexico was 12.5%, compared to a national average of 7.0%. In 1997, a year in which New Mexico higher education's share of the state budget was declining, figures for New Mexico were still significantly higher than the national average, at 10.1% versus 6.0%, respectively. From this evidence, it appears that increased appropriations per student that go directly to higher education will not improve completion. There is nothing to indicate that the state must change its current strategy of how or how much it funds higher education.

IMPLICATIONS FOR POLICY

Context

Every state has a unique landscape that contributes to its current performance and the state of its higher education affairs. In New Mexico, The New Mexico Commission on Higher Education (CHE) is the statutory coordinating body that works to offer a statewide perspective in recommending and establishing policy direction for New Mexico higher education. Institutional budgets go through the CHE, which in turn makes funding recommendations to the legislature. It is widely known, however, that institutions independently approach the legislature for special funds on a yearly basis. The CHE also manages and distributes student financial aid. The constitutional autonomy of the six state universities may, from a structural standpoint, be a countervailing force against the effort to establish a statewide view of higher education. A recent report by Aims McGuinness and commissioned by the CHE gave no strong indication that statewide policy priorities or perspectives were evident in the state.

The following recommendation is based on the analysis conducted in this report.

Recommendation: Two Areas for Consideration

New Mexico may well be financing an expensive higher education system, since there are a large number of institutions, given its population base. This has resulted in strong participation, but there are weaknesses in preparation, completion and benefits. There is not a reasonable balance in performance across the report card categories. In addition, there is no indication that institutions need additional funding relative to national comparisons made throughout this analysis. Current New Mexico investment, as shown through higher education appropriations and student aid, places the state in the first and second quintiles in these categories, respectively. The state is also affordable and students enjoy high participation rates.

The problems of preparation and completion seem to be at issue, and since state investment in the higher education system and student aid appears to be sufficient, two suggested avenues for policy consideration would be: (1) encourage New Mexico policymakers to urge institutions to redirect existing state funds (which are sufficient) to areas that address preparation and completion, or (2) provide actual incentives for institutions that complete students while keeping admissions requirements constant.

The first recommendation is made in light of the realization that policymakers currently do not control where institutional money goes once an appropriation is made to an institution. Given that four-year institutions enjoy constitutional autonomy, this is unlikely to change. The best avenue for the state is to provide encouragement for those institutions that focus monies on preparation areas such as teacher education.

New Mexico should make student preparation a priority. Preparation is significantly correlated to completion, so presumably an increase in preparation would increase the completion grade. There is nothing in the analysis to suggest that increased levels of direct higher education appropriation per student (unless this appropriation were specifically going to some facet of student preparation) or student aid per student would improve either preparation or completion. The state should encourage institutions to redirect existing resources to the priority areas of preparation and completion. The state may also consider providing earmarked money for those institutions that create programs or address issues related to preparation and completion.

The second recommendation formalizes the first: provide incentives for those institutions that demonstrate progress in graduation rates without changing admissions requirements. Access is a part of New Mexico's culture and is commonly affiliated with both affordability and participation. The incentives should require that participation and affordability should remain constant while showing increases in completion or preparation.

In a state like New Mexico, it is highly unlikely that regulatory action will yield fruitful results. Incentives may be more effective, especially given the recent effort by institutions and the Council of University Presidents to take the lead in creating accountability measures for the institutions. The notion of state accountability is also something of interest to the Legislature, so it may have the necessary momentum for formalization.

A FINAL WORD

This report was created to highlight different analyses that might prove useful as supplementary material to Measuring Up 2000. The National Center may wish to pursue some of these ideas further; other ideas may not seem useful for further analysis. Offering a policy recommendation was something I considered important, since states who are serious about the report card are looking for suggestions. Obviously, knowledgeable insiders for each state would have to provide insight to supplement the quantifiable aspects of such a recommendation.

The comparative summary of data can lead to several conclusions regarding New Mexico's higher education. First, it is clear that the state is substantially underperforming in preparation and completion, compared to regional and national averages. New Mexico is also underperforming in the benefits category, but the smaller gap between the state's performance on benefits and the regional and national averages is worthy of mention. A likely explanation emerges from the correlation results. Preparation and completion are significantly correlated. Thus, we would generally expect poor state performance on completion if a state scored low on preparation. In addition, both preparation and completion are positively related to benefits, but only the relationship between preparation and benefits is statistically significant. Participation, however, is also significantly related to benefits. It appears that New Mexico's strong performance on participation is yielding some benefits to the state, and to some degree moderating the negative effect on the benefits score that we would expect because of low preparation.

One observation to be made from the New Mexico performance data is that there is not a balance between preparation and participation. And because both preparation and participation are significantly related to completion and benefits, one strategy for New Mexico would be to more fully address preparation issues as a priority while holding participation constant. New Mexico might still be able to maintain or even increase participation and completion, as students become more qualified to enroll in higher education.

The next two sections will probe the report card categories still further. The intent is to begin to get at possible repercussions, tradeoffs or points of synergy that surface from focusing on preparation over other report card categories. This will be done by drawing on the ratio and state input analyses.

NEW MEXICO COMPARATIVE RATIO ANALYSIS

The comparative ratio analysis for indicators developed and discussed in Section II provides further clues as to New Mexico's position regarding preparation, participation and completion, as well as suggestions for possible areas of emphasis. Table 9 compares New Mexico to both the Western region and the nation across all the ratios developed in Section II. A simultaneous view of multiple ratios is more revealing than individual discussion of the ratios. Regional and national averages for the ratios were calculated and are presented in the table for comparative purposes.

Individually and cumulatively, the ratios in Table 9 offer a profile of New Mexico that speaks to both state and institutional efforts. The report card grades and the ratios would indicate that the state appears to be adequately fulfilling its function to make higher educational opportunities affordable, but that something within the higher education system is a source of difficulty.

Considering affordability, we know that the measure directly involves the state, as the subcategories of affordability include such indicators as state aid to low-income families. We also assume that affordability is partially a function of the state's appropriation investment in higher education, since appropriations presumably affect tuition and fees.

New Mexico's affordability grade score of 84 is well above the national average. But the ratio completion/affordability does not point to affordability as the problem; it points to completion. The state scores significantly below the national average of 1.07 on completion, meaning that New Mexico higher education is not completing as many graduates as the national average, given its respectable levels of affordability. Even as measured by the ratio participation/affordability, we find that, compared to the nation, affordability in New Mexico is so generous that participation is too low. New Mexico already has strong participation, but given affordability levels, we expect participation to be even greater than it is relative to the national average for this ratio. Both ratios involving affordability, along with the affordability grade itself, thus far indicate that the state is adequately funding higher education. The other ratios must be examined to gather additional clues.

The preparation ratios also provide insight. Only one other state in the entire nation, Alabama, has a higher participation/preparation ratio value than New Mexico. This means that higher education in such states as Alabama and New Mexico face greater challenges than the average state, because a large part of their enrollments are comprised of students who are not ready for postsecondary work but are participants in the institutions. One could reason that New Mexico institutions fare so poorly in completion because of the number of unprepared students they allow to participate. Moreover, the completion/preparation ratio adds another piece of information. Ideally, higher education should complete every student who is prepared. New Mexico falls below the national average of 1.02, which means New Mexico institutions are having difficulty completing even those who are prepared. New Mexico higher education, by this measure, is not adding value. This result somewhat overshadows the rationalization that completion rates are low because of low preparation. It points to the institutions themselves as the source of completion problems.

It is important here to note the individual grades for completion and preparation, since New Mexico's completion/preparation ratio does not substantially deviate from the national average. Both the preparation and completion grades are very low. Thus, even if New Mexico's ratio were to exceed the national average, the grades in the separate categories are sufficiently low that they demand attention.

If we look at New Mexico's preparation and participation ratios simultaneously, Alabama again provides a good basis for comparison, because Alabama shares some contextual similarities with New Mexico. Like New Mexico, Alabama has a very low preparation grade but provides participation opportunities beyond what one would expect given the level of preparation (participation/preparation). Both New Mexico's and Alabama's higher education allow students to participate who are not prepared. Yet, Alabama's completion grade is much higher than New Mexico's completion grade, and Alabama's completion/preparation ratio is significantly higher than New Mexico's. The interpretation is that Alabama higher education is somehow able to transform the input of unprepared participants into college graduates, whereas New Mexico is not. The National Center's Measuring Up 2000 report further states that in both Alabama and New Mexico, the percentage of young adults going to college is relatively small, while the percentage of working age adults attending is large. In addition, Alabama, like New Mexico, has a higher than average number of children in poverty and a lower than average income per capita.

It is possible that factors not considered in this analysis are affecting Alabama's success on this ratio relative to New Mexico. For example, according to Net Migration numbers in Measuring Up 2000, Alabama is importing students. This may mean that in-state residents are being left out at the expense of out-of-state students. These out-of-state students may be more successful at completing, which would inflate the completion category for Alabama. Such alternative explanations probably require additional investigation.

Numerous factors may be impacting differences of performance between Alabama and New Mexico, but the similarities between the two provide a useful basis for comparison. No two states are ever going to be completely comparable, but these comparisons illustrate how we can use information about similar states to inform our interpretations of a given state's performance.

NEW MEXICO STATE INPUT ANALYSIS

The analysis of New Mexico for state inputs compared to the nation and Western region is the last piece of evidence considered before final recommendations are made for the state. Table 10 shows New Mexico state input comparative data.

From the analysis in Section III, the general indication was that states that slightly favor aid in the aid/appropriations ratio seem to attain the most successful total average performance on participation, affordability, and completion. New Mexico's aid/appropriations ratio of 5.40 is above the national average, yet the state is in the third quintile for total average performance on participation, affordability, and completion.

New Mexico's mixture of aid/appropriations seems to be working in terms of affordability and participation, but not for completion. It would appear that New Mexico has a reasonable mix of aid to appropriations, compared with other states. In fact, Halstead (1997) calculates that given its tax revenues, New Mexico has supported higher education to a greater extent than other states. In 1991, the percent of total state tax revenues going to higher education in New Mexico was 12.5%, compared to a national average of 7.0%. In 1997, a year in which New Mexico higher education's share of the state budget was declining, figures for New Mexico were still significantly higher than the national average, at 10.1% versus 6.0%, respectively. From this evidence, it appears that increased appropriations per student that go directly to higher education will not improve completion. There is nothing to indicate that the state must change its current strategy of how or how much it funds higher education.

IMPLICATIONS FOR POLICY

Context

Every state has a unique landscape that contributes to its current performance and the state of its higher education affairs. In New Mexico, The New Mexico Commission on Higher Education (CHE) is the statutory coordinating body that works to offer a statewide perspective in recommending and establishing policy direction for New Mexico higher education. Institutional budgets go through the CHE, which in turn makes funding recommendations to the legislature. It is widely known, however, that institutions independently approach the legislature for special funds on a yearly basis. The CHE also manages and distributes student financial aid. The constitutional autonomy of the six state universities may, from a structural standpoint, be a countervailing force against the effort to establish a statewide view of higher education. A recent report by Aims McGuinness and commissioned by the CHE gave no strong indication that statewide policy priorities or perspectives were evident in the state.

The following recommendation is based on the analysis conducted in this report.

Recommendation: Two Areas for Consideration

New Mexico may well be financing an expensive higher education system, since there are a large number of institutions, given its population base. This has resulted in strong participation, but there are weaknesses in preparation, completion and benefits. There is not a reasonable balance in performance across the report card categories. In addition, there is no indication that institutions need additional funding relative to national comparisons made throughout this analysis. Current New Mexico investment, as shown through higher education appropriations and student aid, places the state in the first and second quintiles in these categories, respectively. The state is also affordable and students enjoy high participation rates.

The problems of preparation and completion seem to be at issue, and since state investment in the higher education system and student aid appears to be sufficient, two suggested avenues for policy consideration would be: (1) encourage New Mexico policymakers to urge institutions to redirect existing state funds (which are sufficient) to areas that address preparation and completion, or (2) provide actual incentives for institutions that complete students while keeping admissions requirements constant.

The first recommendation is made in light of the realization that policymakers currently do not control where institutional money goes once an appropriation is made to an institution. Given that four-year institutions enjoy constitutional autonomy, this is unlikely to change. The best avenue for the state is to provide encouragement for those institutions that focus monies on preparation areas such as teacher education.

New Mexico should make student preparation a priority. Preparation is significantly correlated to completion, so presumably an increase in preparation would increase the completion grade. There is nothing in the analysis to suggest that increased levels of direct higher education appropriation per student (unless this appropriation were specifically going to some facet of student preparation) or student aid per student would improve either preparation or completion. The state should encourage institutions to redirect existing resources to the priority areas of preparation and completion. The state may also consider providing earmarked money for those institutions that create programs or address issues related to preparation and completion.

The second recommendation formalizes the first: provide incentives for those institutions that demonstrate progress in graduation rates without changing admissions requirements. Access is a part of New Mexico's culture and is commonly affiliated with both affordability and participation. The incentives should require that participation and affordability should remain constant while showing increases in completion or preparation.

In a state like New Mexico, it is highly unlikely that regulatory action will yield fruitful results. Incentives may be more effective, especially given the recent effort by institutions and the Council of University Presidents to take the lead in creating accountability measures for the institutions. The notion of state accountability is also something of interest to the Legislature, so it may have the necessary momentum for formalization.

A FINAL WORD

This report was created to highlight different analyses that might prove useful as supplementary material to Measuring Up 2000. The National Center may wish to pursue some of these ideas further; other ideas may not seem useful for further analysis. Offering a policy recommendation was something I considered important, since states who are serious about the report card are looking for suggestions. Obviously, knowledgeable insiders for each state would have to provide insight to supplement the quantifiable aspects of such a recommendation.

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