Texas Policy on Community College Finance – Performance Funding (HB 8)

Last Updated: 03/24/2024

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House Bill 8 was passed unanimously in the Texas Senate and signed into law by Governor Greg Abbot in June 2023. HB 8 calls for strengthening community colleges by establishing a new performance-based funding system that elevates and invests in credentials of value—including quality nondegree credentials (QNDCs).

The legislation was the culmination of months of work by legislators, community college leaders, and the business community, and expands upon the year-long efforts of the Texas Commission on Community College Finance (TxCCCF).

The new model moves to an outcomes-based approach and rewards colleges for awarding degrees, certificates, and other “credentials of value.” HB 8 is viewed as an important tool to help enhance the role of public community colleges in workforce training and preparation for high-demand careers.

Key Features

  • Aligns policy and funding incentives with the rapidly changing needs of the workforce.
  • Puts dual credit students in high schools on pathways toward meaningful credentials.
  • Expands opportunities for adult learners.
  • Transfers the Texas Adult Career Education (ACE) program from Austin Community College to the Texas Higher Education Coordinating Board (THECB).
  • Creates the Financial Aid for Swift Transfer (FAST) scholarship program for low-income dual credit students.
  • Focuses on measurable student-focused outcomes that include:
    • The number of credentials of value awarded, including badges, certificates, and degrees, that position graduates for well-paying jobs.
    • Credentials of value awarded in high-demand fields where employers are looking for skilled employees.
    • Successful student transfers from community colleges to four-year universities.
    • Completion of a sequence of dual credit courses, which are offered to high school students and can set them on early pathways to success. 


HB 8 was based on recommendations laid out in the TxCCCF report, submitted to state leaders in advance of the 88th legislative session. The report offered three sets of recommendations for a new model in support of the goals in Building a Talent Strong Texas, the state’s strategic plan for higher education:

  • Reward community colleges for positive student outcomes.
  • Increase affordability and financial aid, including for low-income students.
  • Increase capacity at colleges to meet changing workforce needs.


Media Releases


Texas House Bill 8 becomes law, paves way for innovative community college funding - Texas Higher Education Coordinating Board


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