Gov. Rick Perry today is expected to announce an ambitious legislative agenda for higher education, with cash awards to colleges for each student they graduate, mandatory exit exams and an increase of about $363 million in financial aid.

The governor also wants to spend $57 million to boost the number of nursing graduates because of a growing shortage in the field. Overall, his two-year budget will call for $9.8 billion in state appropriations for higher education, nearly 8 percent more than the current allocation.

The Austin American-Statesman obtained a summary of the plan, prepared by the governor's office, on Wednesday.

A key provision would provide up to $350 million, including nearly $300 million in new spending, to create financial incentives for public four-year schools, community colleges and health-related institutions to increase the number of students completing degrees or certificates. In other words, the schools would be rewarded for graduating more students.

"Universities get a sum certain for each student receiving a diploma," the summary says. "Additional weight is given, and therefore more money, for students considered at-risk or majoring in the critical fields of engineering, math, physical science, nursing, computer science, allied health, and math and science teacher education."

At-risk students are defined in the summary as those who are from low-income families, got below-average scores on college entrance tests, entered college on a part-time basis or were at least 20 years old when they enrolled.

The prospects for the governor's agenda are uncertain. Lt. Gov. David Dewhurst said last week that he would like to boost financial aid by hundreds of millions of dollars but cautioned that university leaders would have to agree to hold tuition rates steady.

Perry's proposal includes no restriction on tuition. The Legislature ceded tuition-setting power to university governing boards in 2003.

Parts of Perry's plan — including exit testing and linking college funding to students' success — echo themes in a report last year by a special panel appointed by U.S. Education Secretary Margaret Spellings and chaired by Charles Miller, a Houston investor and former chairman of the University of Texas System Board of Regents. The plan also reflects some recommendations from the Governor's Business Council, a private group, but not the council's call for a new agency, organized as a public corporation with broad planning and budgetary powers, to replace the Texas Higher Education Coordinating Board, which currently oversees postsecondary education.

"I think it is a bold vision," said James Huffines, the current chairman of the UT regents and a longtime Perry adviser. "We still need to see some of the details. I do think this is the best starting point for higher education going into a session that we've had for at least two decades."

A key feature of Perry's proposal is his plan to reward colleges for each student who graduates from a public college or university. About 90 percent of the students enrolled in higher education in Texas attend public institutions.

The average payment to schools per graduate would be $2,229 for general academic institutions, $1,216 for community colleges and $8,200 for health-related schools, according to the proposal summary.

These incentive payments could be as much as $30.9 million for UT-Austin, $26.6 million for Texas A&M University, $9.8 million for Texas State University-San Marcos and $3.7 million for Austin Community College.

The governor's office contends that this performance-based approach would advance statewide goals established in 2000 by the coordinating board to increase enrollment and graduation rates, especially for Hispanic and black students, who lag behind white students. Such increases are needed to meet future work-force needs and to ensure that the state is competitive with other large states.

The exit exam would be an existing standardized test or a licensing test required for a student's field. A student who got a failing grade on the exit test could still graduate, but colleges would receive more money when students got higher scores.

Financial aid programs would be overhauled and streamlined under the governor's proposal. Three existing aid programs — the Texas Grant, the Tuition Equalization Grant and the Texas Educational Opportunity Grant — would be combined into a new Tuition Assistance Grant.

A separate program, known as the B-on-Time Loan, would be increased dramatically, with $405 million for the biennium, up from $21 million in the current budget. The loan is interest-free, and, for students who graduate on time and meet other conditions, does not have to be repaid.

The financial aid recommendations also include $44 million to increase the number of engineering and computer science graduates, and $23 million for a work-study program. Altogether, state spending for loans, grants and work-study aid would rise 60 percent, to $964 million.

rhaurwitz@statesman.com; 445-3604

Perry's higher education agenda

•Reward schools financially for each student who graduates, with more money awarded for at-risk students and students majoring in math, nursing and other fields deemed critical.

•Boost state appropriations for financial aid by $363 million, or 60 percent, to $964 million for 2008-09.

•Increase overall state spending on higher education by 7.8 percent, to $9.8 billion, for the biennium.

•Repeal current law requiring lump-sum appropriations to institutions and instead provide more detailed budgets to increase transparency.

•Require the Texas Higher Education Coordinating Board to contract with the Texas Guaranteed Student Loan Corp., a public nonprofit created by the Legislature in 1979, to administer the state's financial aid programs, including determination of eligibility.