The exterior of Dallas College’s El Centro Campus in downtown Dallas on Nov. 14, 2025.
Juan Figueroa/Dallas Morning News
Texas cannot afford its revised community college financing plan, but higher education leaders assured lawmakers on Wednesday their schools will weather coming budget cuts.
Overall, community college leaders, speaking before the state Senate Committee on Higher Education in Austin, lauded the performance-based funding program as a major success. They pointed to the increase in credentials earned and enrollment growth of 12% in the last two years.
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In 2023, Texas lawmakers switched to a funding model that rewards student success, allocating dollars based on how many students earned credentials or transferred to four-year universities.
Student outcomes have exceeded what the state budgeted for.
The community college funding formula went from $1.8 billion before the change to $2.4 billion now, far above what lawmakers anticipated, said Ray Martinez, president and CEO of the Texas Association of Community Colleges. The state has a $1.2 billion cap on funding it can distribute to community colleges before the next legislative session.
To bring the program back within budget, the state’s higher education board last week voted to cut funding for academically and economically disadvantaged students and adult learners over age 25. The change in funding from fiscal year 2026 to fiscal year 2027 is expected to decrease by about 6.5%, but changes vary for each college.
Related: What is the Classic Learning Test, and could Texas incorporate into college admissions?
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Dallas College is expected to see a decrease in funding of 2.8%, and Tarrant County College a decrease of 6.4%. Collin College is expected to see a 7.1% increase.
Other community college districts could lose over 15% of their current budget.
College leaders at the committee meeting assured state lawmakers that this year’s cut is a temporary blip and funding will stabilize in the coming years. Martinez requested the Legislature appropriate funds next year to offset this year’s cuts and improve forecasting to avoid future shortfalls.
“Our colleges are counting on a continued partnership with the Texas Legislature, just as you are counting on us to help Texas students enter the workforce,” Martinez told Texas senators.
Gov. Greg Abbott’s ongoing tuition freeze compounds the issue, limiting another revenue source for community colleges.
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They are left looking for short-term solutions.
For example, San Jacinto Community College District Chancellor Brenda Hellyer said the cuts will impact raises for faculty and academic advising staff. The San Jacinto Community College district will lose about $4.2 million in 2027, a 7.8% decrease from this year.
“It’s a very positive system, but I think we just have to continue to work through some of these growing pains,” Hellyer said.
Even as Texas runs into problems with community college financing, higher education officials supported a similar performance-based funding model for four-year universities. Public universities currently receive money based on enrollment, along with “institutional enhancements” that support faculty recruitment and other operations.
When asked if this model could work for four-year universities, Brent Wallace, chancellor and CEO of North Central Texas College in Gainesville, told lawmakers that it would make sense for some programs in those schools, particularly ones with strong workforce ties.
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Last week, the Texas Higher Education Coordinating Board supported a model that would partially fund universities based on the fields students study and how long they stay enrolled. However, to officially change any financing, the Texas Legislature will have to hash it out in the next legislative session, which begins January 2027.
The DMN Education Lab deepens the coverage and conversation about urgent education issues critical to the future of North Texas.
The DMN Education Lab is a community-funded journalism initiative, with support from Bobby and Lottye Lyle, Communities Foundation of Texas, The Dallas Foundation, Dallas Regional Chamber, Deedie Rose, Garrett and Cecilia Boone, Judy and Jim Gibbs, The Meadows Foundation, The Murrell Foundation, Ron Steinhart, Solutions Journalism Network, Southern Methodist University, Sydney Smith Hicks, and the University of Texas at Dallas. The Dallas Morning News retains full editorial control of the Education Lab’s journalism.