Texas lawmakers are considering a new funding model for public universities, which would provide more money to institutions based on student success. The Texas Higher Education Coordinating Board (THECB) recommended this approach, which would tie 40% of the incentive funding to students remaining enrolled and reaching certain credit-hour milestones.

Performance-Based Funding Model

The proposed model would also allocate 60% of the funding to universities that award bachelor’s degrees with a financial return, defined as a degree that allows graduates to earn enough within 10 years to recoup the cost of college and surpass the earnings of a typical high school graduate. Additionally, universities could receive extra funding for graduating economically or academically disadvantaged students, adult learners, or those who returned to college after an extended period.

The THECB’s recommendation comes as state leaders signal a desire to limit spending. Governor Greg Abbott, Lieutenant Governor Dan Patrick, and House Speaker Dustin Burrows have instructed public universities, colleges, and state agencies to request 3% less in baseline state funding. However, the proposed funding model would require additional state funding to support the incentives.

Community College Funding

The THECB also reduced incentives for community colleges, which have outperformed predictions and earned more money than budgeted. The community college funding model, overhauled in 2023, ties funding to outcomes such as degree completions or transfers to universities.

Original reporting: Texas Tribune (HLL/CB) — read the source article.