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Understanding HB 8: Bolstering supports for low-income students

Renzo Soto, Policy Advisor

This is the third installment in the Texas 2036 blog series on House Bill 8, this legislative session’s main effort at overhauling the funding formulas for the state’s community colleges and providing supports for the workforce of the future.

We conclude our review of the community college finance reforms in HB 8 by diving into its investments in financial aid and student supports.

Academic and workforce student financial aid investments

After graduating from high school,

  • 43% of economically disadvantaged Texas students enroll in postsecondary education
  • 64% of non-economically disadvantaged students enroll in postsecondary education

Closing this gap will require removing as many barriers to enrollment as possible, particularly cost barriers.

Community colleges rely more on tuition as a share of their total revenues than in years past. As the chart below illustrates, reliance on tuition and fees as a revenue source for community colleges has increased over the past 40 years — from 16% in 1980 to 29% in 2020.

HB 8 blog series pt 3 TX community college revenue by source

Lowering barriers to financial aid

HB 8 moves to address this cost barrier by investing $125 million in the Texas Education Opportunity Grant program, the state’s need-based financial aid program for community college students. Before HB 8, the program had only enough funding to serve about 28% of eligible students. Now, at least 70% of eligible students will receive assistance.

As an added benefit, students can qualify for TEOG regardless of whether they choose to pursue an academic or workforce credential, ensuring that workforce programs are emphasized just as much as academic programs.

Lowering barriers to dual credit

The state also dedicated $78.6 million to financial aid for low-income high school students who want to take a dual credit course. Students who qualify for free or reduced price lunch are also entitled to a scholarship through the new Financial Aid for Swift Transfer program established by HB 8.

This scholarship ensures that low-income students whose college participates in the FAST program can take dual credit courses at no cost to them or their families. In addition to helping address affordability, the FAST program also helps provide community colleges with a pipeline of students who can help the schools meet both the dual credit outcome metric and, ideally, the credential of value attainment outcome metric in the new formula funding system.

HB 8 has the potential to improve Texans’ postsecondary outlook for generations to come. Through a cohesive and intertwined package of reforms that systemically prioritizes outcomes and workforce value in the state’s long-term funding formulas, Texas has an opportunity to lead the nation in changing the way we approach and view higher education. But this will require implementing HB 8 with a strong dedication to data and monitoring whether students ultimately complete the credential they need to succeed in the workforce and earn a living wage.

Texas 2036 will remain engaged throughout this process. Stay tuned as we continue this blog series with future deep dives into each component of HB 8 and data-driven recommendations for implementation that will help the state achieve its postsecondary and workforce goals.

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