This is, well, novel. From Inside Higher Ed comes news that the Indiana Commission for Higher Education has plans to cut state university budgets. But the funding cuts will not be arbitrary or even. According to the article:

Indiana’s commissioner of higher education recommended distributing budget cuts to state colleges based in significant part on a set of performance measures.

The Indiana Commission for Higher Education’s decision to disproportionately cut the budgets of some institutions because their per-student costs are higher and their completion rates are lower is consistent with the state’s recently expanded performance funding system.

To accompany the performance funding system, and presumably give schools a little more warning, the commission also issued a list of “efficiency guidelines” (available here).

The commission plans to cut state budgets disproportionately because the new budget will reward—or punish less—schools with better performance, colleges that operate efficiently or have high student course or degree completion. State budget cuts to higher education are traditionally based mostly on enrollment numbers.

The incentive here, aside from the obvious “cut costs now,” is to reward schools for making responsible decisions and to spur other schools to do the same. The trouble is that schools that aren’t doing a very good job won’t be getting any money to improve. And most students, after all, make decisions about colleges based on price, geographic location, and degree prestige, not institutional efficiency or student course completion. And it’s the students who will be directly hurt by funding cuts

Well, tough times call for tough choices.

Daniel Luzer

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer