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Rethinking community colleges and the workforce of the future

Renzo Soto, Policy Advisor

Legislators this year took a historic step toward fundamentally realigning the way Texas funds its community colleges. The goal? Ensuring Texans are earning postsecondary credentials that will give them greater access to higher-paying careers.

The product of years of work by a commission established to rethink community colleges’ financing systems, this reform effort emphasized funding formula changes, college capacity improvements and student affordability investments.

Aligning funding to student outcomes

Reform efforts this year focused largely on establishing a new funding system for community colleges in Texas. The old, enrollment-driven funding formulas presented many challenges for the state’s community colleges, especially with the enrollment declines of recent years. That has led to funding instability felt particularly acutely in small and rural colleges.

The state responded by overhauling this enrollment-based system to more directly align community college funding to student completion of a postsecondary credential that has proven workforce value.

This new system based on documented improvements of students’ outcomes has great potential to vastly improve the skilled Texas labor force. Despite steep enrollment decreases during the pandemic, community colleges still serve nearly 700,000 students across the state. That means community colleges remain well-positioned to equip large numbers of Texans with the specialized skills required by emerging and high-demand jobs.

Providing more support for community colleges

To accelerate the alignment of community colleges’ course offerings with workforce demands, lawmakers also took steps this year to build up the capacity of community colleges, including the continuation of the Texas Reskilling and Upskilling through Education program.

TRUE grants help community colleges start or expand short-term credential programs aligned with regional and statewide workforce needs. They serve students ranging from young, first-time-in-college students to those already in the workforce.

Since the inception of the TRUE program in 2021, colleges have used the funds to establish programs such as advanced manufacturing mechatronics, automation and construction management certificates, and patient care technician certifications.

Expanding opportunities to more Texans

For these reforms to achieve the desired effects, the state must also address the accessibility of a postsecondary education.

Only 43% of economically disadvantaged Texas students currently go on to enroll in postsecondary education after graduating from high school. That’s compared to 64% of non-economically disadvantaged students. Closing this gap will require removing as many barriers to enrollment as possible, particularly cost barriers.

Lawmakers this year invested $125 million in Texas Education Opportunity Grants, the state’s need-based financial aid program for community college students, and $78.6 million in financial aid for low-income high school students to take a dual credit course through the newly established Financial Aid for Swift Transfer program.

The FAST scholarship ensures that low-income students whose college participates in the program can take dual credit courses at no cost to them or their families. The FAST program also helps community colleges by providing a supply of students whom they can help achieve outcomes rewarded by the new funding formulas. Specifically, that includes completing dual credit hours required by degree and other credential programs and, ideally, also earning a postsecondary credential of value alongside their high school diploma.

Through a cohesive and intertwined package of reforms that systemically prioritizes outcomes and workforce value in the state’s long-term funding formulas, Texas can lead the nation in changing the way we approach and view higher education.

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