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A New Plan for Community College Funding to Fuel Texas’ Economic Success

By August 9, 2023THECB News

A modern community college funding model supports the critical role these institutions play in driving our economy.

With the ninth-largest economy in the world, Texas has led the nation in job growth over the past year. That growth is expected to continue.

At the same time, by 2030, more than 62% of all jobs in Texas will require education beyond high school, according to the most recent projections from Georgetown’s Center for Education and the Workforce. As things stand, only 48% of working-age Texans have certificates or degrees beyond high school diplomas. But Texas has never backed down from a challenge.

Texas community colleges are uniquely positioned to play a key role in addressing the skills gap challenge by helping more Texans earn the credentials required for high-demand, well-paying jobs.

One of the most significant accomplishments from the 88th Texas Legislature was the passage of House Bill 8 (HB 8), which Governor Abbott signed into law in June. This bill brings innovative reform to community college funding, thanks to the years of work, collaboration, and recommendations by the Texas Commission on Community College Finance.

The result of HB 8 is a groundbreaking new funding model that moves community colleges from a static system based primarily on students’ time in class to a modern and dynamic outcomes-based formula that supports the critical role community colleges play in driving our economy. For the first time, the state will support community colleges based primarily on specific outcomes that are aligned with the state’s higher education strategic plan, Building a Talent Strong Texas, as well as regional and state workforce needs.

The outcomes driving this new model include:

  • the number of high school students who complete 15 semester credit hours in dual credit or dual enrollment courses;
  • the number of community college students who transfer successfully to public four-year universities or complete 15 semester credit hours in a structured co-enrollment program; and
  • the number of community college students who earn credentials of value, which offer purpose in the economy, value in the labor market, and opportunities for good jobs and meaningful careers.

This work is just one way we are striving to meet the ambitious goals set out in Building a Talent Strong Texas, aligning our state’s higher education goals with workforce needs. Doing so will help Texas meet the demands of tomorrow through an educated workforce prepared for high-quality employment opportunities.

Across the country, higher education leaders are grappling with enrollment challenges and questions about the value of higher education. Today, Texas is leading the way nationally in tying funding for community colleges to measurable, student-focused outcomes that address these issues with data-driven solutions. It is a strategy many states will be watching closely as Texas puts it into practice.

The agency, together with its institutional partners across the state, is putting this policy into action, addressing long-standing funding challenges for community colleges while also putting graduates in position to succeed professionally and continue to meet the rapidly changing needs of the Texas workforce.

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