Texas and Oregon Each Emphasize Student Success in New Community College Funding Formulas

• States are increasingly focused on student outcomes at community colleges.
• In Texas, lawmakers changed the state's community college funding formula to emphasize high-value credentials.
• In Oregon, state officials added metrics to emphasize success of historically underserved students into the community college funding system.
• The changes underscore an increased focus on equity and return on investment at community colleges.

States are changing how they distribute funding to community colleges. And although their methods and metrics vary, student success and outcomes are paramount.

In Texas, lawmakers opted to overhaul funding to community colleges to emphasize credentials of value awarded and successful transfers to four-year institutions. In Oregon, higher education officials revised state funding to better emphasize student success, particularly among historically underserved groups.

Community colleges are anchor institutions in their communities that serve as key access points to higher education. And in recent years, they have stepped up as key workforce development partners.

As states look to close skill gaps and expand access to higher education, student outcomes are becoming a key point in overhauling community college funding.

Texas Prioritizes High-Value Credentials

The new Texas community college funding model signed into law by Republican Gov. Greg Abbott on June 9 will prioritize credentials of value in funding community colleges.

That new formula aims to incentivize community colleges toward providing credentials with good return on investment that lead to well-paying jobs, according to a press release from the Texas Higher Education Coordinating Board.

The metric ties funding to outcomes including the number of high-demand credentials awarded, student transfers to four-year schools, and completion rates of dual credit courses for high school students.

Texas community colleges are uniquely positioned to play a key role in helping more Texans earn the credentials required for high-demand, well-paying jobs, Texas Commissioner of Higher Education Harrison Keller said in the release.

By signing HB 8 into law, policymakers have marked a commitment to fund community colleges in ways that align our state's emerging workforce needs with strategic funding, resources, and postsecondary opportunities that lead to a credential of value.

Texas Association of Community Colleges President and CEO Ray Martinez III said in the release that the legislation was a collaborative effort between educators, lawmakers, and other stakeholders — and added that the state's community colleges look forward to leading the nation in higher education innovation.

The move toward high-value credentials came after a yearlong review effort by the Texas Commission on Community College Finance, whose recommendations the legislation was based on.

Texas's community colleges enroll and serve almost half of all students pursuing postsecondary education in our state, so they are an important engine that is propelling our future workforce and economy, commission chair Woody L. Hunt said in the release.

This innovative funding will help community colleges make strategic decisions about how they best prepare their students to successfully enter the workforce or successfully transfer to a four-year university after graduation and ensure that all students are set up for success. This will strengthen our state and workforce for generations to come.

Earning high-value credentials can help equity gaps and boost social mobility, BestColleges previously reported. Dual enrollment courses for high school students and programs for adult learners have been shown to increase enrollment at community colleges across the country.

Oregon Focuses on Equity

Oregon's Higher Education Coordinating Commission (HECC) approved an equity- and success-based funding revision at its June 8 meeting in another move toward outcome-focused funding.

For the first time, we are strategically dedicating a proportion of taxpayer funding to improving student success at Oregon's 17 community colleges, while continuing the foundational funding that is focused on getting students in the door and supporting the incredible programs these colleges offer, Oregon HECC Executive Director Ben Cannon said in a release.

This change is good news for students, for colleges, for Oregon's diverse regions and communities, and for all our partners who are working together to better support thriving futures for Oregonians from underserved populations across the state.

Oregon's model previously distributed funding almost entirely based on student enrollment alongside base payments to support college operations, according to the release, but will now incorporate a higher degree of student outcomes and equity.

Enrollment will still be a key aspect of the state's community college funding system. But new metrics will be used to distribute money: Up to 10% of state taxpayer funding to community colleges will be based on the enrollment and outcomes of underserved students.

The student success components focus on low-income learners, adult students, career/technical education seekers, and underrepresented students as identified by race/ethnicity, the release reads.

The new funding formula provides a mechanism to achieve our institutional and state equity goals while ensuring financial stability, Clackamas Community College President Tim Cook, who also chairs the state's community college presidents' council, said in the release. This is a win for our students, our colleges, and our state.