Texas Higher Education Coordinating Board recommends changing public university funding system to focus on student success metrics

August 7, 2026 - 09:41

A significant change to how Texas public universities receive state money is on the table. The Texas Higher Education Coordinating Board put forward a new funding model during its July 22 quarterly meeting, suggesting the state move away from paying schools based on credit hour enrollment. Instead, the board wants to tie funding more directly to student success metrics, such as graduation rates and the number of degrees awarded.

The proposal is not an immediate change. It is set to go before the Texas Legislature when the next regular session starts in January 2027. Under the current system, universities get money largely for the number of students they enroll and the total credit hours those students take. The new plan would add a performance-based component, rewarding schools for getting students across the finish line.

Board members say the shift is meant to push universities to focus not just on getting students in the door, but on helping them complete their programs. The details of which specific metrics would be used and how much of the funding would be tied to performance are still being worked out. The board will continue to refine the proposal over the next year and a half, with input from university leaders and other stakeholders.

If adopted, the change would be a major overhaul of the state's higher education funding formula. It could also influence how universities allocate their own resources, potentially steering more money toward advising, tutoring, and other support services. The board's recommendation is the first formal step in what is likely to be a lengthy and closely watched process.