Senator Eliot Shapleigh - El Paso, Texas

Texas' public universities live and die by how many students show up for the new school year. More students bring more money, even if they later drop their classes or fail to graduate.

Some influential state leaders want to change that rule, arguing that it would benefit students and taxpayers alike. And they've just received a $1.8 million grant toward that goal.

The Lumina Foundation, a nonprofit higher-education group, is announcing the award today. It's part of a $9.1 million effort in seven states to make universities more efficient and award more diplomas.

Texas education officials say they'll also use the grant to make it easier for students to transfer from two-year to four-year colleges.

"We're trying to get to a point where we encourage students to finish and be successful," said David Gardner, a deputy commissioner at the Texas Higher Education Coordinating Board, the agency receiving the grant.

This is the latest effort to make Texas public universities more productive and careful with taxpayer dollars. In September, Gov. Rick Perry ordered the Coordinating Board and public universities to study ways to save money. He has also advocated giving campuses cash awards for each student who graduates.

Changing the state's formula for funding colleges and universities would require legislative approval. Much of the grant money would go toward building support for such a change.

Lee Jackson, chancellor of the University of North Texas System, said state funding based on course completion "would be hard for anyone to argue with." But he said it would probably be a modest reform, because most Texas campuses have similar completion rates.

Jackson liked the idea of helping students transfer more easily from two-year to four-year schools. He cited a practical example of excessive paperwork that discourages students and costs money: "We have some situations where students have to fill out two complete sets of records at the community colleges and universities," he said.

Texas education leaders say the grant will help with the state's "Closing the Gaps" plan for higher education, which aims to boost enrollment and success in college, especially for low-income, Hispanic and black students.

At the University of Texas-El Paso, which serves mostly Hispanic students, president Diana Natalicio said she's OK with a focus on degrees and classes completed, so long as the state includes students who attend part time or transfer from one campus to another.

Natalicio said financial aid is also important for keeping students in school. "At UTEP, the reason students end up not completing a course is usually financial. It's usually some crisis that occurs that has nothing to do with their academic performance," she said.