As Tarrant County lawmakers prepare to open the Texas Legislature on January 14th, Fort Worth Report reporters examine the policies that will be reorganized in Austin. Click here for more information on the law.
Two years ago, lawmakers transformed the way community colleges in Texas are funded. The 89th Congress is scheduled to convene on January 14, and higher education experts expect lawmakers to make adjustments to House Bill 8, which overhauls the system.
“HB 8 was a really dramatic change for community colleges. The previous formula was tied to enrollment and was pretty volatile, especially with declining enrollment at local colleges.” said Grace Atkins, a policy adviser at the partisan public policy group Texas 2036. “HB 8 moved us almost entirely to an outcomes-based approach.”
Hundreds of millions of dollars are set aside each year by states to reward community colleges based on student performance.
The state’s community colleges receive additional funding for students who earn degrees in high-demand fields and workers with those degrees earn higher wages than workers with only a high school diploma. I can do it. Additional funding is also tied to transfers to public four-year colleges and high school students who have earned at least 15 hours of credit in certain academic or workforce programs.
Atkins said one proposal in the next Congress would count transfers to private four-year colleges as compensation. At this time, only transfers to public universities are counted. Another proposal would ensure that funding for the law and its incentives is provided annually.
“The formula itself is not automatic in the sense that there is no base level amount that Congress automatically allocates each session,” Atkins said. “This is something that Congress needs to continue to come back to and fund every session.”
Tarrant County College received approximately $64 million in performance-based state funding in fiscal year 2024 through House Bill 8. The fiscal year 2025 allocation was reduced by millions of dollars to about $59.6 million, according to state data.
In most performance measures, funding allocations for universities in fiscal year 2025 decreased compared to the previous year. The most notable decline was in transfers to four-year colleges. The allocation for fiscal year 2024 was approximately $21.2 million, which decreased to $15.3 million for fiscal year 2025, a decrease of nearly $6 million. Funding was reduced by approximately $3 million based on degrees earned by TCC students.
Compensation for students earning dual credit increased by nearly $5 million, from $4.3 million in fiscal year 2024 to $9.1 million in fiscal year 2025. A TCC spokesperson did not respond to a request for comment on how the new funding model has affected the university system, which enrolls more than 47,000 students across six campuses.
How state funding works for community colleges in Texas
Credential of Value Attainment rewards each value credential awarded to community college students. The types of credentials awarded as benefits range from traditional college degrees to skill-focused (often short-term) certificates, certifications, licenses, and even digital badges. Value Achievement Qualifications in High Demand Fields provide bonus incentives for value qualifications associated with high demand fields based on labor market data. Successful transfer to a four-year university is awarded to a community college student who successfully enrolls in a four-year university for the first time. Students must complete at least 15 semester credit hours at a community college before enrolling in a four-year university. Dual credit completion rewards high school students who complete at least 15 hours of dual credit in a specific certificate or degree program.
The remaining funding for community colleges is provided through the “Base Tier” formula. Funding can be received through this method by demonstrating that the local tax base and student organization do not generate sufficient revenue to pay basic educational and operating costs through property taxes and tuition and fees, respectively. Only certain community colleges can receive funding through this method.
Source: Texas 2036
State law also provides for free tuition for low-income high school students who take dual credit classes. Following the passage of this law, Tarrant County College extended free tuition to all dual credit high school students in August 2023.
“We expect to see an increase in the number of high school students taking advantage of educational opportunities at TCC in the future,” Tarrant County College President Elva LeBlanc said at the time. “The board’s decision to waive dual trust is a bold move that will benefit the entire community.”
Once free tuition went into effect, 26% of Tarrant County College students enrolled in fall 2023 were dual-enrolled high school students. The year before, it was nearly 24%, according to data from the Texas Higher Education Coordinating Board. According to Tarrant County College, there are 12,500 dual enrollment students entering the college this year in fall 2024, representing 26.4% of enrollment.
“This bill itself creates a pathway, both in terms of bringing community college into high schools through dual credit, and in providing students with additional outcomes for transfer to four-year colleges. “Atkins said.
State lawmakers and higher education advocates will review whether HB 8 is working well to meet the state’s workforce needs in the next legislative session.
The Fort Worth Report’s coverage of the Texas Legislature is supported by Kelly Hart. At The Fort Worth Report, news decisions are made independent of board members and financial supporters. Learn more about our editorial independence policy.
Shomial Ahmad is a higher education reporter for The Fort Worth Report in partnership with Open Campus. Contact shomial.ahmad@fortworthreport.org.
The Texas Tribune partners with Open Campus for higher education coverage.
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