Community College Finance

With the passage of House Bill 8 in 2023, Texas is transforming the way it funds community colleges. Texas is moving away from a static system tied primarily to students’ time in class to a modern and dynamic outcomes-based formula that reflects the needs of our world-class economy. For the first time, we will support community colleges based on specific goals aligned with our 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;
• community college students who transfer successfully to public four-year universities or complete 15 semester credit hours in a structured co-enrollment program;
• and 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.

Significantly, these outcomes will also be weighted to recognize the higher costs of educating students from economically and academically disadvantaged backgrounds and adult learners.

The new Texas community college finance system rewards colleges for their progress toward our state’s higher educational goals while also ensuring colleges have access to the resources needed to support their mission to educate and train the workforce of the future.

On August 22, 2023, the Texas Higher Education Coordinating Board approved emergency rules enabling the implementation of the new funding system beginning September 1, 2023. The Board also plans to adopt final rules in January for Fiscal Year 2024, and final rules in April 2024 for FY 2025.

• FY 24 CC Funding Model: a public-facing draft model of FY 24 formula and non-formula support funding for public junior colleges (updated July 14, 2023)
• FY 24 CC Funding Summary: a PDF of the draft FY 24 formula funding runs for public junior colleges extracted from FY 24 CC Funding Model (updated July 14, 2023)
• FY 24 CC Funding 3Pay: a PDF of the draft FY 24 Three-Pay Schedule for public junior colleges extracted from FY 24 CC Funding Model (updated July 14, 2023)
• View a full list of high-demand fields.
• Commissioner Memorandum: Announcing draft formula funding models for FY 24 (July 14, 2023)
• Memorandum to CFOs and Reporting Officials: Detailed information on draft FY 24 formula model (July 14, 2023)
• Commissioner Memorandum: Important: Community college finance reform – what you need to know (June 8, 2023)