Southern Oregon University administrators are “cautiously optimistic” that sweeping changes to the state’s funding formula for public universities will mean more, not less, money for the school.

Earlier this month, the governor-appointed Higher Education Coordinating Commission unanimously approved a new funding formula — the Student Success and Completion Model — based on the number of Oregon students graduating rather than the number of seats filled.

“Right now, the only thing that generates revenue is increasing enrollment,” said Ben Cannon, executive director of the HECC. “But we want to reward institutions not only for enrolling more students, but for seeing them through to successful completion of a degree.”

The state’s Public University Support Fund accounts for about 20 percent of a large university’s total revenue and, this year, about 32.5 percent of SOU’s operating budget, Cannon said. Tuition and fees make up the rest.

In the past, about 30 percent of the PUSF was carved out for support for regional universities, including SOU, research and public service while the remaining 70 percent was distributed based on an enrollment-driven formula, explained Brian Fox, HECC’s administrator of public university budget and finance.

Under the new formula, the state will maintain its 30 percent commitment to regional universities, but of the remaining money, 60 percent of it will be based on student outcomes and only 40 percent on enrollment, Fox said.

The formula will be phased in over the next four years, during which time there will be protections in place so institutions don’t gain or lose too much.

“At the end of the day, it means that about half of the Public University Support Fund is distributed based on these student outcomes,” Cannon said.

The formula also would provide extra support for universities for low-income, minority, veteran and rural students earning degrees, as well as students earning degrees that are in high demand in Oregon.

The HECC worked closely with a steering committee of educators, student representatives and university faculty, including Craig Morris, SOU’s vice president of finance and administration, to develop the new model.

According to an HECC forecast based on the Ways and Means Committee’s proposed $635 million budget for public universities in the next biennium, SOU’s state revenue would jump from $16.6 million in 2015 to $19.4 million in 2016. However, the increase includes money to cover the cost of shifting university governance from the Oregon State Board of Higher Education to SOU’s newly minted board of trustees.

SOU spokesman Ryan Brown said the university received more than $14 million from the state in 2013-14, while bringing in more than $42 million in tuition and fees. But until legislators decide how much to invest in public universities in the next biennium, SOU can’t accurately predict the financial impact on the school.

“It’ll depend on how large the pie is before we’re able to determine what the funding will look like in years going forward,” Brown said.

Under the Ways and Means Committee’s proposed budget, SOU likely would receive more funding than it does now even if the new formula reduced the percentage of the state’s public university support fund that it received, Brown said.

The additional funding, he added, would be crucial if the school is to add or expand programs that would improve student outcomes. University-level investments proposed last Monday to the Joint Subcommittee on Education included expanding the Pirates to Raiders program to three additional middle and high schools, hiring more financial aid staff and allocating more resources to Raider Academy to improve the retention of first-generation, low-income students.

Between fall 2013 and fall 2014, SOU’s enrollment raised slightly — about 100 students. But it retained 74 percent of its full-time freshman that year, compared with 68 percent the year before.

Last year, SOU awarded 841 students bachelor’s degrees, 118 students certificates and 234 students master’s degrees.

“SOU leaders are cautiously optimistic and will go forward hoping that (the new formula) will be beneficial to SOU and institutions and students across the state,” Brown said.

Reach education reporter Teresa Thomas at 541-776-4497 or tthomas@mailtribune.com. Follow her at www.twitter.com/teresathomas_mt.