Texas has long failed to get most of its students the higher education credentials the workforce increasingly demands. But recent laws that reward schools for helping students succeed later in life could help the state make up lost ground, experts say.
The Texas Higher Education Coordinating Board regularly tracks if students enrolled in eighth grade eventually receive a degree or certificate at a two- or four- year institution within the state.
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The proportion of students who have received a degree has climbed over the last 15 years, according to data the board released in December 2025.
Still, the state appears to be far short of meeting workforce demand. Nearly three-quarters of U.S. jobs will require education or training after high school by 2031, according to Georgetown University’s Center on Education and the Workforce. In Texas, 25% of students obtained such education or training within the state. (The coordinating board didn’t track students who went out of state for college every year.)
Students who are economically disadvantaged are far less likely to receive a degree or certificate. In Texas, nearly 60% of public education students are economically disadvantaged.
“Texas is a tale of two states,” says Jesse Hendrix, executive director of College Possible, a national nonprofit focused on supporting low-income students through college. “On one hand, Texas is the eighth largest economy in the world; on the other, Houston now holds the highest poverty rate of any major U.S. city.”
Nearly 80% of students in the Houston Independent School District are socioeconomically disadvantaged, compared to about 60% statewide. And only 15% of students from the district received a degree or certificate, compared to 25% statewide.
But Hendrix also notes that rural regions face their own challenges, including limited broadband access, sparse postsecondary options, and long commutes to reach college campuses.
Male students also lag behind female students, and Black and Hispanic students face lower completion rates than their peers.
Sharp dropout rates have long persisted as students journey through high school and college. More than a decade ago, former Texas Higher Education Commissioner Raymund Paredes called it “leakage in the pipeline”.
Economically disadvantaged students, males, and Black and Hispanic students are more likely to experience it.
Despite these shortcomings and disparities, Texas ranks near the middle nationally in degree attainment.
Texas historically pioneered innovative policies, but its competitive edge was lost as the state was rolling back some initiatives, which other states also adopted, experts said. More recent policies — including bonus funding for schools with college and workforce success — may help Texas regain its edge. But the impacts aren’t yet fully known.
“This combination of wide-ranging disparities, fast-changing policies, and bold outcomes-based reforms makes Texas both one of the most challenging and most opportunity-rich environments in the country,” Hendrix said.
Economic challenges
Higher ed credentials are “one of the most reliable pathways to economic stability and long-term mobility,” according to Will Davies, the director of policy and research at Breakthrough Central Texas, a nonprofit focused on supporting first-generation students.
Davies notes that “even short-term credentials and associate degrees are associated with meaningfully higher earnings compared to a high school diploma alone,” citing a wage analysis by Commit Partnership.
But students from working-class and low-income families have to weigh more heavily the cost of college and household responsibilities with a shot at greater economic security, Davies said. He stressed that taking breaks away from post-high school education or training — often called “stopping out” — can backfire.
“Students who delay or stop out often accumulate debt without earning a credential, limiting both their earning power and their confidence in returning to school later,” he said.
Staying on track can be particularly difficult for economically disadvantaged students, according to Ann Vlach, who oversees Education to Employment Partners, a nonprofit that helps agencies in the Corpus Christi region support students as they progress through college. Things like work commitments, car repairs, and the need to line up child care can derail student progress, she said.
“It’s much harder to get back into that system once you’ve stepped away from it,” she said.
Shifting policy, middle-of-the-pack results
Compared to other states, Texas has hovered around the “middle of the pack,” depending on the year and metric, said Carlo Castillo, a data analyst with Texas 2036, a nonprofit working on pressing statewide issues such as workforce development. He further noted that while Texas higher ed attainment accelerated in the past ten years, it’s still close to the national average.
In 1997, Texas created the Top 10% Plan, a first-of-its-kind program guaranteeing admission to high school students in the top 10% of their class. Then in 2001, Texas was the first state to provide in-state resident tuition for undocumented youth with the Texas Dream Act.
“Those types of policies tend to be impactful for student outcomes,” said Brian Holzman, an assistant professor at Texas A&M, who researches demographic gaps in higher ed attainment.
Hotzman pointed to research from 2010 by Stella Flores, then an assistant professor at Vanderbilt University, who uncovered a sharp enrollment boost among foreign-born Latinos in Texas and other states that allowed undocumented students to pay in-state tuition.
But Texas rolled back these policies, undermining their aim to address disparities. Undocumented students in Texas no longer qualify for in-state resident tuition or state-distributed aid.
The Top 10% plan can slightly increase the number of students of colors automatically admitted into Texas colleges. But, Hotzman said, it does not increase the number of students of color as much as race-conscious admission policies had. Amidst these changes, Hendrix said that College Possible has recently experienced a steep increase in requests for help from students and school districts in Texas trying to navigate the challenges of applying for and obtaining financial aid.
“Students are facing the consequences of newly regressive policies, such as a repeal of the Texas Dream Act, which directly fuels the affordability crises for many currently enrolled college students and those that are considering their next move after high school,” he said.
Promising Texas policies
Across Central Texas, the E3 Alliance partners with higher ed, employers, nonprofits, and policymakers to develop the student pipeline.
“The playbook is already in place for Texas and the eighth largest economy in the world, to really put together this massive workforce,” said Kyle Seipp, Senior Director at E3, which focuses on higher education and workforce development.
He points to some policies already in place that should help more students attain the degrees or certificates they need:
- The College, Career, or Military Readiness Outcomes Bonus, which was established in 2019, provides bonus funding to school districts with the highest rates of students who finished high school ready for college or the workforce. To address demographic disparities, this bonus is provided in separate categories for economically disadvantaged students, non-economically disadvantaged students and special education students.
- A 2023 law restructured community college funding to incentivize schools that demonstrate students are making progress toward obtaining a workforce credential and completing college, rather than just boosting enrollment.
Because the state tracks the outcomes of students over the course of many years, the impacts of these laws won’t be apparent until the coordinating board has time to track whether recent eighth-graders end up attending or completing college or training programs.
Grace Atkins, a policy advisor at Texas 2036 focused on workforce and postsecondary education, is encouraged by these laws and thinks Texas is ahead of the pack with funding models based on student outcomes.
“Outcomes-based funding is something that is talked about a lot nationally, but Texas, more so than any other state, really, really emphasized that,” she said.
Vlach, with Education to Employment Partners, said the student outcomes bonus should help districts cover the costs of academic advising, which will aid students in filling out the Free Application for Federal Student Aid, or FAFSA, and preparing them for college admissions tests.
To help keep districts on track to earn a bonus, Vlach carefully tracks the outcomes data as it’s being updated and presents it to principals and superintendents every month.
“If we’re starting to see that we’re struggling with getting FAFSA done, if we’re doing that data once a month, it gives us a very active chance to pivot on that and do a FAFSA workshop,” she said. “Pull in more parents, do whatever we need to do to make that happen.”
“Same thing with testing,” she added. “If we’re not seeing testing happen, we can actually go in and say, like, hey, it’s time to do a testing workshop.”
About this analysis
Data for this analysis was obtained from the Texas Higher Ed Coordinating Board. We tracked outcome results for eighth grade students between the 1997-98 and 2013-14 school years and combined them into one longitudinal dataset.
The agency’s 8th Grade Cohort Longitudinal Study, now known as the Texas Talent Trajectory, tracks groups of Texas public school eighth graders over 11 years. This data is broken down by race/ethnicity, gender and economic status.
Students are counted as completing high school if they graduate from a Texas public high school within 4 to 6 years of enrolling in eighth grade. This excludes students who finished high school out of state or at a private Texas high school, as well as those who receive a GED.
Students are counted as receiving a higher education credential if they earn an associate or greater degree at a Texas public institution, or a certification from a THECB-approved program, within 11 years of enrolling in eighth grade.
In 2022, THECB adopted the Talent Strong Texas plan and is now tracking higher ed attainment for students until they are age 64. To allow for more historical analysis, we stuck with THECB’s older method.
Other stakeholders have relied on different methods when looking at high school graduation trends and higher ed attainment. While these methods result in different figures, the overall patterns — steady improvement in attainment over time, with disparities by demographic group — remain the same.
Disclosure: Commit Partnership and Texas 2036 have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune’s journalism. Find a complete list of them here.