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Report: All eyes on Texas community college reform

January 24, 2023

DALLAS—Texas’ community college system stands out in the nation for its job-focused education and employer partnerships, but much more can be done to bolster this vital function of community colleges, according to a report authored by Tamar Jacoby, president of Washington-based nonprofit Opportunity America, and published today by the Federal Reserve Bank of Dallas.

The Commission on Community College Finance recently recommended reforms to the state’s system, and the Texas Higher Education Coordinating Board has recently released statewide data by race and ethnicity.

“Texas community colleges are taking advantage of the noncredit division’s signature strength: its unique ability to provide just-in-time job training,” Jacoby writes in All Eyes on Texas: Community Colleges Focus on Preparing the Workforce of Tomorrow.

Given rising demand for middle-tier workers, Jacoby notes recent changes to the state’s community college system. They include directing emergency pandemic funding to workforce education and certificate programs; a new definition of “credentials of value,” which measure the value added of job-focused education, and establishment of the Commission on Community College Finance.

She also explores further proposals, such as outcomes-based funding for job focused education, financial aid for noncredit students in short job-focused programs, ways to encourage employers to partner with community colleges and making it easier for learners to transition from noncredited to credited education later in life.

Key points in the report include:

  • 34 percent of full-time Texas community college students graduate within four years of enrolling in a two-year program, and 25 percent transfer to a four-year college or university, according to state higher education data.
  • 23 percent of Hispanic students who enrolled in community college in 2014 had transferred to a four-year college or university within six years, compared with 30 percent of non-Hispanic white students and 45 percent of Asian American students, state data show.
  • In 1980, state formula funding accounted for 68 percent of community college revenues in Texas. By 2020, the share had shrunk to just 26 percent, increasing the burden for poorer students in districts with lower tax revenue. 

“There remains much to be done to produce more equitable educational outcomes and deliver the workers the state will need as economic growth accelerates in the years ahead,” Jacoby writes. “But Texas is ideally positioned to build on existing reforms and go the next mile, showing the way for educators nationwide as it unlocks the potential of one of the state’s most important institutions.”

The views expressed are those of the author and do not reflect those of the Federal Reserve Bank of Dallas or the Federal Reserve System.

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Media contact:
Jon Prior
Federal Reserve Bank of Dallas
Phone: 214-922-6857