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MCC funding could be tied to alumni outcomes under state proposal

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McLennan Community College officials are closely following a proposal that would tie state aid to colleges such as theirs to student outcomes, such as how many students move on to four-year college, earn degrees or land jobs.

Meanwhile, officials with Waco-based Texas State Technical College say they already have been operating under similar guidelines for several years, with promising results.

The new proposal comes from the Texas Commission on Community College Finance, a legislative commission charged with revamping how Texas pays for community colleges.

The commission this fall is fine-tuning recommendations to base state funding formulas on outcomes rather than enrollment numbers. The commission is also weighing more grants and financial support for low-income students. The commission next meets Oct. 18 with a final report due Nov. 1. The Texas Legislature is expected to take up the issue in its spring 2023 session.

What those changes would mean for MCC is unknown, but President Johnette McKown finds the direction encouraging in that the suggested plan could reduce competition for a fixed amount of state funding while letting colleges focus more on student outcomes.

“We’re excited about the possibilities of the new model,” she said. “The details are being worked out ... but on the surface, we have no reason not to be supportive.”

The commission, whose members include legislators, business executives and college presidents, released a draft of its proposals earlier this month. They call for several major shifts in how the state funds community colleges, which roughly amounts to about a quarter of most colleges’ revenue, the balance coming from local property taxes and student tuition.

Under the recommended outcomes-based plan, community colleges would find their state revenue based in large part on how many students are successful in going on to four-year colleges or jobs, with incentives for employment in high-demand fields.

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McLennan Community College has seen its enrollment numbers stagnate in the last few years. Officials see promise in a results-based funding formula proposed by a state commission.

For now, student enrollment and credit hours determine the majority of state revenue a community college receives, with more allocated for “success points” awarded for students completing degrees or certifications. The state also provides a basic level of support for all schools.

Community college enrollment here and statewide has been declining in recent years. The Texas Higher Education Coordinating Board reports that from 2010 to 2021, enrollment in academic and continuing education workforce programs had dropped by 113,180 students at a time when statewide demand for trained workers has been increasing.

MCC has seen its enrollment decline in recent years, even outside of the impact of the COVID-19 pandemic, with fall enrollment this year at 7,158 students, down from last year’s 7,742 total.

Tying state money to student achievement would allow community colleges to concentrate more on helping students succeed at what they need to move into the workforce, independently of what other colleges are doing.

“We would be working against ourselves, so to speak, and that’s a good thing,” McKown said.

The commission draft also proposed:

  • Increasing state support for low-income college students. Texas Educational Opportunity Grants currently serve about 28% of eligible students; the commission proposes expanding that to 70% of eligible two- and four-year college students.
  • Guaranteed funding for community colleges with low tax bases.
  • Incentives to boost training for jobs in high-demand fields.
  • Encouraging shared services between colleges to lower operational and administrative costs.
  • Financial aid for dual credit students.

McKown noted that MCC already covers or defrays dual credit tuition for low-income students in some local school districts. Some larger colleges offer dual credit classes for free, while others rely on dual credit tuition as revenue, which may shape the commission’s final dual credit recommendation.

The MCC president welcomed possible state support for student services not directly tied to academics.

Texas Higher Education Commissioner Harrison Keller believes the timing may be right to position Texas community colleges for the future.

“We’ve got strong momentum to drive some historic change in our community college finance system,” he told the Texas Tribune for a Sept. 9 story.

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A state commission is proposing to tie aid to colleges such as McLennan Community College to student outcomes.

Public schools

A move to outcome-based funding for community colleges would continue a general trend in the state’s support of both K-12 public schools and higher education.

A major part of public schools’ annual accountability ratings hinges on how many students go on to college, jobs or the military after finishing high school, even though those ratings don’t affect state school funding.

“It’s 40% of our rating so it’s a heavy part of our accountability,” explained Denise Bell, Waco Independent School District director of accountability systems and data analysis.

The Texas Education Agency provides much of the post-graduation data for students with districts responsible for what’s required to get students to their next step beyond high school.

Districts’ College, Career and Military Readiness rating isn’t broken down into its individual components, but combined into a single figure.

Waco ISD starts reminding students in their junior year what they need to finish by graduation, such as classwork, testing, industry certification and the like. Students then draw up a plan at the beginning of their senior year that will outline the path to complete those CCMR requirements, Bell said.

WISD’s accountability ratings released last month show the district scoring 76 out of 100 for CCMR. With high school graduation rates improving, district officials will look at improving its CCMR numbers, Bell said.

TSTC's view

The shift from enrollment-driven funding to an outcome-based model is one that the Texas State Technical College system navigated almost a decade ago. In 2015, TSTC went through a system overhaul, part of which included a funding model dependent on the jobs and salaries of its graduates.

The transition was painful, particularly at TSTC campuses with broader general education offerings, such as Harlingen, recalled TSTC vice-chancellor and CFO Jonathan Hoekstra.

TSTC officials cut 13 degree and certification programs, some with high enrollment, in order to focus on skills training that would lead to higher paying jobs. System enrollment dropped roughly 25% to about 9,000 students.

Moving to an outcomes-driven model, however, sharpened TSTC’s focus on its mission of workforce training in the state. Training programs are honed to provide students with what’s needed for the workplace and not much beyond that. New ones are added only if they point to well-paying jobs in high demand fields.

“It did affect us in a profound way,” Hoekstra said. “When you shift to quality of placement and quality of earnings (as outcomes), we begin everything with an end in mind.”

The value-added accountability funding formula used for TSTC goes beyond the percentage of graduates getting good jobs. State funding hinges on how much those jobs pay above the average minimum wage for that position and students are tracked for five years beyond graduation by the Texas Workforce Commission, including those who take nine or more credit hours, but don’t finish a program.

The result is a jobs- and skills-training TSTC system with a measurable impact on the Texas economy. The latest cohort of TSTC graduates tracked by the state are earning more than double than the first cohort after the funding change, Hoekstra said. “We’re contributing to the Texas economy in a much bigger way,” he said.

System officials continually evaluate Texas labor market data to determine what’s needed in terms of workforce training, and while funding formulas drive them to prioritize higher paying employment, they also can adjust to a changing Texas economy and an ever-growing demand for skilled labor, Hoekstra said.

“The need (for trained workers) is absolutely overwhelming and there’s an extraordinary skills gap,” he said. “There’s significant spending on infrastructure. Companies are relocating to Texas. All of that requires manpower. This funding formula works very well for us.”

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