TSTC's Funding Change And The Demand For Technical Workers

Oct 2, 2014

Students who enroll in the Texas State Technical College system range from recent high school grads to older folks who’ve been out of school for years. But all of the students are trying to learn skill sets to improve their career opportunities, and usually, make more money. Last year the Texas Legislature changed the way TSTC is funded—no longer would the school be funded based on how many students were at the school or how long they stayed—but rather, the school would be rewarded for how much alumni wages are above the minimum wage.


AJ Ramsey is 19 years old and four semesters into TSTC Waco’s welding program.  He’s painstakingly grinding down the rough edges of a pipe to get it ready to be welded. It’s called “fitting up,” it can take hours, and it’s an important skill for a pipeline welder…that’s what A.J. wants to be.

"Pipeline welding," A.J. says. "That’s where the money is. All my friends want to do it."

Pipeline welders can make about $50,000 per year when they graduate. When AJ leaves TSTC, his wages will be tracked by the Texas Workforce Commission, and along with everyone else who leaves TSTC, the average of those wages will determine how much funding the school gets from the state. It’s part of a law implemented by the Texas Legislature last year. The more money alums make, the more funding TSTC gets.

A lot of students come to TSTC’s welding program with prior experience, which instructors say has to be un-learned sometimes. But even after just nine semester hours of instruction, some students have learned enough to go make more money. Joe Melendez is the chair of TSTC’s welding department.

"We’ve brought just a ton of employers down here looking for welders," Melendez said. "It used to be that they used to be looking for 5-10 welders, well now companies are looking for 50-100 welders. That’s how much the industry has exploded on us."

Edgar Padilla is the director of career services at TSTC.

"Often times those students will be courted by industry because they know that they have a particular skill set and they have the ability to learn additional skill sets and they can do that in the field or in the industry where they work," Padilla said.

Those students, even if they haven’t completed a certificate or a degree their wages will be factored into TSTC’s funding.

"We count that as a success," Padilla said. "The student leaving TSTC and becoming gainfully employed in an industry where we’re confident that they’re going to make a strong salary for years to come. That’s a success story in our eyes, because we’ve done our job."

TSTC System Chancellor Mike Reeser says this new funding formula helps instructors focus on getting students ready to be gainfully employed as soon as possible.

"We want to get the students through with the right amount of training, training that is germane to their career goals, not more, not less and not to charge them any more than they need to pay in order to get that degree because that optimizes our funding too," Reeser said.

TSTC’s funding used to be pretty much the same as other colleges and universities in the state—funding dollars corresponded with the amount of time students were in class, receiving instruction. Reeser says that the new funding formula allows the school to focus on students’ contribution to the economy. The school provides industry with skilled workers, and students with higher wages. By measuring the difference between minimum wage and average alumni wages, TSTC says they’re getting funded based on improvement.

Here’s just one example of that improvement: Dustin Baker graduated from TSTC West Texas’s downhole tool program last December. He got a job working in the fracking industry in North and West Texas. Before TSTC, he was a server and bartender for 10 years until one day his friend dragged him to a TSTC career fair.

"When I started beyond a hammer, screwdriver and ratchet, those were the only tools I had used in my life," Baker said. "I walked into a field that’s gonna be driven not only with special oil field tools, but learning how to fix and repair them. I went in knowing absolutely nothing about what I was getting myself into just off of the word of a friend of mine."

Baker says he was pulling in about $30,000 a year as a bartender. His program cost him $3,000. He says he paid that off in the first month of his new job. He now makes $75,000 a year.