Texas Board Proposes Funding Model Tied to Student Completion and Workforce Outcomes

The Texas Higher Education Coordinating Board released a recommendation to supplement current university financing with a performance-based model that emphasizes measurable student outcomes. Under the plan, 60% of additional funding would be tied to graduates obtaining degrees that generate earnings exceeding education costs, defined as “credentials of value.” The other 40% would be allocated based on students reaching 30-, 60-, and 90-credit milestones, with the highest rate for the 30-credit benchmark.

Institutions would also receive limited rewards for maintaining enrollment from one fall term to the next, capped at 25% to avoid extending time to degree. Thomas Lindsay of the Texas Public Policy Foundation called the approach an improvement over enrollment-only funding but suggested adding clear civics education expectations. The board identified high-demand fields such as agricultural management, veterinary technology, computer programming, and various education roles as priority outcomes. The proposal is slated for legislative review in January 2027.