Texas legislators discuss outcome-based funding for community colleges and student retention strategies

The Alabama Joint Legislative Education Committee convened on August 29, 2025, to discuss the future of funding for higher education in the state, focusing on outcomes-based funding models. The meeting highlighted the need for a funding formula that not only allocates resources based on student enrollment but also emphasizes institutional performance and alignment with state workforce goals.

Key discussions centered around the importance of designing a funding formula that rewards continuous improvement in student outcomes. Committee members expressed concerns about retention rates, particularly for first-generation college students, and the need for institutions to provide additional support to help these students succeed. The conversation underscored the necessity of retaining students beyond their initial enrollment, as early dropouts represent a loss of investment for the state.

The committee also explored the differences between K-12 funding and higher education funding, noting that while K-12 schools are required to accept all students, colleges and universities have more discretion in their admissions. This distinction raises questions about how funding should be allocated to encourage institutions to meet state workforce needs without penalizing them for not achieving certain metrics.

Another significant point of discussion was the need for flexibility in funding models. Committee members emphasized that any new funding approach should not be punitive but rather supportive, enabling institutions to invest in resources that enhance student retention and success. The goal is to ensure that graduates are equipped with degrees that lead to high-wage jobs, addressing the alarming statistic that 52% of college graduates are underemployed.

The meeting concluded with a commitment to further explore how other states have successfully implemented outcomes-based funding and to consider the establishment of a regulatory authority similar to a Board of Regents to oversee these changes. The committee aims to create a collaborative framework that allows for adjustments in funding based on institutional performance while ensuring long-term commitments to support higher education in Alabama.