After 10 years without a funding increase, community colleges in Texas got a boost this year from the state legislature with a change in the funding formula.
The Texas Commission on Community College Finance was created with the passage of House Bill 8 in 2023.
The Texas Higher Education Coordinating Board’s website said the state 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 site says.
Brian Jones, executive director of Professional Learning at Odessa College, represented OC.
“It was their chance to really revolutionize how community colleges are funded from the state level and it benefits us greatly,” Vice President for Institutional Effectiveness Janice Hicks said.
“We were really ahead of the curve because we’ve been focused on outcomes, students completing, students getting dual credit and students transferring for a long time,” Hicks said. “It rewards and incentivizes the work that we’ve been doing, so I think … without knowing the formula, we were able to receive additional funding that we wouldn’t have received with old model.”
Hicks said OC has been using student outcomes to measure performance for at least 10 years. Hicks, who is leaving for another job opportunity in the Dallas area, has been at the college for four years.
“We’ve been looking at the data and seeing where the gaps are and focusing on getting the students through completion,” she said.
Hicks said she doesn’t know if there is a model across the country that uses outcomes-based funding.
She noted that the Federal Reserve Bank in Dallas had an article saying that all eyes are on Texas to see how the model works.
“I think they’ve done a really good job. I love that they focus on affordability for students. They have increased the Texas Educational Opportunity Grant, and they’ve also offered this financial aid option for students in dual credit who are from low-income backgrounds, the FAST program,” Hicks said.
“A part of the funding was for infrastructure and the data model to collect the data and ensure that there’s a good process to receive the number of outcomes from the institutions. We’ve already seen that become a little bit more streamlined for us,” she added.
Permanent rules have not yet been made, so emergency rules are currently in place. Permanent rule making will occur in January, so they haven’t been able to guesstimate how much funding the college could get in future years.
The previous model was based on contact hours, which are an hour of scheduled instruction provided to students.
“… They’ve been good about asking for feedback, so at the campus level, we’ve had several conversations with them about feedback on the implementation of it all …,” Hicks said.
There are two tiers to the new funding formula. One tier is for institutions whose local tax don’t cover their operational expenses.
“We don’t get that because we have a really great local tax base. Our tier is performance tier. All of our funds from the state come from” student outcomes, Hicks said.
“Those outcomes include students who earn certificates, students who earn associate degrees, students who earn bachelor’s degrees, students who are also earning certificates in CE (continuing education), students who are earning certificates that lead to licensure; students who’ve earned 15 hours in dual credit; students who’ve transferred with 15 credit hours from the community college, and then students who are co-enrolled at a community college and university in the state. So it’s all about the outcomes of students as a way to incentivize institutions to focus more on the outcomes and also enrollment,” Hicks said.
Community colleges will get more frequent payouts with the new system and the better they do, the more funding they will get.
Previously, community colleges would get same funding for two years of the biennium.
Hicks said students will benefit due to the expansion of the Texas Educational Opportunity Grant program.
For dual credit, the FAST program is giving students who qualify for free and reduced lunch a chance to take dual credit classes.
“Because if you look at the dual credit literature, it says students who take at least one or two dual credit classes in high school are more likely to attend college and earn a degree. We know we need to get more degree earners in this area …,” Hicks said.
She added that it’s positive for students because there is more funding, but it’s also positive for institutions also because they have more funding to provide support and wraparound services they need to complete their degrees.
Hicks said it’s shifting the behavior of institutions from getting students into class to getting them out the door with a degree because there is incentive to do so.
It also incentivizes community colleges to partner with k-12 schools and universities.
None of the funding OC will get is connected to contact hours.
“… There’s an additive benefit for students who are adult learners, so 25 years or older; students who are economically disadvantaged per FASFA; if they’re Pell Grant students; and students who are academically disadvantaged, who are in co-requisites or developmental education courses. We also get additive benefits based on high-demand fields — students who complete a certificate, associate or a bachelor’s and on what the state has determined is a high-demand field. I think they were very thoughtful in the process in creating the formula funding and of course, I’m sure over the years there’ll be some tweaks as we continue to implement and provide feedback over the next couple of years,” Hicks said.
One of the main things the college is asking the state to develop a process where regions like the Permian Basin can take care of needs here so they can show up on the list of high-demand fields.
“They’ve been receptive to that feedback,” Hicks said.
The region Odessa is in goes all the way out to El Paso.
OC has always focused on high-demand fields.
“We have a process. Within the institutional effectiveness team we have an economist who runs all of the labor market data to make sure our programs are aligned. We have a program review process where each year we’re looking at the programs to make sure they still align and make sure their outcomes and the students are able to be employable in the fields,” Hicks said.
She added that she is excited about House Bill 8 because it focuses on students earning their credentials, which means they will have more opportunity for social mobility, economic mobility and earning a family sustaining wage.
Looking at the labor market data, Hicks said the needs in the Permian Basin may have seen some shifts, but they’re pretty consistent.
“… One of the areas that we’re focusing on is behavioral health because we’re preparing for the behavioral health hospital and we just have a shortage of mental health clinicians in this region…,” Hicks said.
They are also still focused on teachers, nurses, allied health, safe truck drivers, automotive diesel and welding.
“… One other area we’re looking at is cybersecurity. That’s a kind of a newer field that’s on the list that we’re seeing a great need for as technology advances,” Hicks added.
Hicks said OC has a process for starting new programs.
“Cybersecurity is at the committee level, so there is a new program committee that’s reviewing it for us. That committee will make a recommendation to the admin team and then later to the board on what we need to move forward with — whether that’s your certificate, or associate degree, or even a bachelor’s degree,” Hicks said.
