Texas Announces Updates to HB 8 Community College Funding Requirements

Recently, The Texas Higher Education Coordinating Board (THECB) released updates and clarifications to rules adopted in June 2023 for FY 2024. The updates apply to FY 2025 and include changes in four areas: Credentials of Value, Fundable Credentials, High-Demand Fields, and Methodology and Process Changes.

OSAs (Occupational Skills Awards) and ICLCs (Institutional Credentials that Lead to a Licensure or Certification) with Shared Hours

• If a student earned multiple OSAs or ICLCs in a fiscal year and any of those awards shared any hours, only one credential should be submitted for funding.
• If a student completes both an ICLC and an OSA in the same fiscal year that shared hours, the OSA should be reported.
• If a student earned multiple ICLCs or OSAs that shared hours, priority should be given to reporting an award in a high-demand field.
• ICLCs of fewer than 80 contact hours or 144 contact hours awarded under a CIP code not on the high-demand fields list are excluded from data collection.

 FY 2023 ICLC Completion Reporting

• Institutions must submit and certify their ICLC completions using the updated collection template.
• When resubmitting ICLC completions for FY23, exclude ICLC awards sharing hours with an OSA awarded to the same student in the same year.
• If a student earned multiple ICLC awards with shared hours, they should report only one ICLC award.

FY 2023 OSA Completion Reporting on the CBM00M

• OSA completions for FY23 will be pulled from the CBM00M report.
• Only submit one OSA completion from a set of OSAs that share hours awarded to the same student in the same year.
• Institutions may resubmit and recertify the FY23 CBM00M data based on the updated instructions.
• Contact the Data Analysts for assistance or to request updates to the FY23 CBM00M submission.

Texas initiated significant changes to the way state funding is distributed to community colleges with the enactment of HB 8, which Texas Governor Abbott signed into law on June 6, 2023.  State funding will now be tied more directly to student graduation rates and other outcomes. General revenue for community colleges will vary based on student population, operating activities, transfer relationships and other factors.

Change to new state funding formulas

Texas community college are funded primarily from three main sources:

• State funds. Prior to HB 8, community colleges received state funding based on formulas that primarily measured student “contact hours.”
• Local funds. Local taxes approved by a locally elected governing board.
• Tuition and fees. Revenue collected from students.

In an effort to increase graduation rates and other performance measures, HB 8 increased state funding while also making significant changes to the way state funding is distributed to community colleges through funding formulas.

State funding will be distributed through two different allotments:

Basic Allotment. Based on student attendance.

Performance Allotment. Based on the number of students who:

• Received degrees, certificates, and other credentials from credit and non-credit programs identified as a “credential of value” by a coordinating board
• Earn at least 15 semester credit hours or equivalent and subsequently transfer or are enrolled in a structured co-enrollment program
• Complete 15 credit hours or equivalent for dual credit courses that apply toward academic or workforce programs at the postsecondary level

HB 8 will require community colleges to transition to new reporting metrics in order to meet the requirements of these new funding formulas. To make the most of this transition, community colleges will need to have in place a solid analytics infrastructure. Valuable analytics will include:

• Student failure rates by educational track, professor, or program to identify areas to improve student graduation
• Courses with low transferability to other institutions
• Analyzing funding of student educational resources (e.g. tutoring lab, virtual enablement, etc.) compared to student performance
• Forecasting success calculations based on student “pipeline”

Much of this data is available in current systems, but it will need to be aggregated and analyzed to project the financial impact of these new metrics. Additionally, community colleges will need to ensure that their IT systems can produce accurate information to support the new state reporting requirements.

Weaver has developed a three-step data analytics methodology to support community colleges as they navigate the transition to the new funding formula requirements. This process includes understanding the data landscape, developing reporting solutions to minimize the reporting impact, and optimizing investment and funding strategies with data driven metrics.

The information above is an update of the following August 28, 2023 post on this topic, Helping Community Colleges Prepare for the Impact of HB 8:

Contact us for information.

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