Texas State Technical College is the first college in the nation whose instructional funding will be determined solely by results or outcomes.

The “Returned Value” funding model is collaboration between the Texas High Education Coordinating Board, TSTC and the Legislative Budget Board, and other relevant agencies.

The funding formula will be implemented for the 2014-15 biennium, and will reward job placement and graduate earnings projections instead of time training or contract hours.

“Right now every public education institution in Texas is paid on some sort of contact hour formula, which is basically how long you keep a student in a seat per semester,” TSTC-Marshall President Randall Wooten said. “But the problem with contact hour funding, there is no accountability.”

According to Wooten, TSTC officials began corresponding with legislatures about five years ago about having a portion of their pay for performance.

He said performance can be defined by a lot of different metrics and each place a performance can look different for different institutions.

“People come here for skills. And we call that placement, placing someone in a job or career. That is a metric we want to be measured by and the state legislature has accepted that,” he said.

He said it is important to note the formula works well with TSTC because the institution’s overall focus is to place students in jobs as quickly as possible.

Currently, the college has a job placement rate at nearly 90 percent.

“The formula works very well for TSTC whose job it is to put people to work. It doesn’t work well for a community college because their primary job is to take students and move them from a 2 year institution to a 4 year institution,” he said.

He said the college is still working out the overall details as to how the state will monitor students and their job placement.

“The devil is going to be in the details. There is some way to track a student Texas workforce commission can track it. We don’t know who is going to be responsible exactly because it is going to take a lot of state agencies to make it work,” he said.

He said the state will monitor the types of jobs students are hired in to based on the student’s overall earned salary.

“I believe there will be a baseline and whatever our graduates get above the baseline will be part of our compensation,” he said.

He said he is referring to the current model as “Value Funding Model 1.0” because there will be plenty of changes made over the next five to six years.

“This is so new, we are going in to it with a lot of faith and hope and modified as time goes on based on realities,” he said.

In order to increase the number of students who are placed in jobs, the college will work to establish better relationships with businesses and industries in East Texas.

He said it is worth noting TSTC-Marshall offers degrees concentrated on industries within a 50 mile radius and their needs.

“We have always concentrated on servicing the needs of the businesses and industries in our region,” he said. “We have great relationships with our industries and companies in East Texas. But they have to get stronger.”

He said faculty and staff and the college have always made a commitment to place the young men and women in jobs by staying informed about which industries and businesses in the area are hiring.

“The typical education model says the longer I keep you here the more money I get,” he said. “We are going to turn that upside down. The faster I get you in and get you out the more money I get. I get paid for helping you do what you want to do.”

The college is also planning on providing more up front assessment and counseling about the impact of the types of career choices.

He added it is worth mentioning the many of the students are placed in jobs before graduating from the college.

“Our graduation rate, we are number two in the state and it is 49.2 percent, and our two year rate is around 30 percent,” he said. “Some come here leave get a job leave and come back with a degree over a four to five year period.”

With the new funding formula, the college hopes to set a standard for the nation considering it is the first of its kind.

“Used to you could say I want it faster, better cheaper, and people would say pick two you cannot have all three,” he said. “With this formula you can have all three. You can have it better, faster and cheaper.”