A New Funding Formula Is Coming. Here's What It Means

What Is the CHEER Act? What Alabama's New Higher Education Funding Law Means for HBCUs

Alabama has officially adopted a new approach to funding public higher education.

The College and Higher Education Excellence and Results (CHEER) Act (HB565) was signed into law and establishes a new performance-based funding model for the state's public colleges and universities. Beginning October 1, 2026, institutions will have the opportunity to earn additional state funding based on measurable student outcomes rather than enrollment alone. For Alabama's HBCUs and HBCCs, this legislation presents both an opportunity and an important moment for advocacy.

What Is the CHEER Act?

The CHEER Act creates a new CHEER Fund, which will provide performance-based funding to public institutions based on measures such as:

• Student retention

• Degree completion

• Student success

• Workforce outcomes

• Alignment with Alabama's high-demand, high-wage careers

  
  

The law also establishes an Outcomes-Based Higher Education Funding Coordinating Committee, which will determine how these performance measures are weighted and how funds are ultimately distributed. While the framework has been established, many of the details that will shape institutional success are still being developed.

Why This Matters for HBCUs and HBCCs

Alabama's HBCUs and HBCCs are eligible to compete for CHEER funding. However, eligibility alone does not guarantee equitable outcomes. Much will depend on how the final performance formula is designed. Questions that deserve careful attention include:

• Will equity-focused student success measures be included?

• Will HBCUs and HBCCs have meaningful representation on the coordinating committee?

• How will "high-demand" and "high-wage" careers be defined for institutions serving rural and historically underserved communities?

• Will the formula recognize the unique missions of institutions that educate large numbers of first-generation, Pell-eligible, and adult learners?

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The answers to these questions will help determine whether the CHEER Act expands opportunity—or unintentionally widens existing funding disparities.

What Institutions Should Do Now

Although implementation begins in October, preparation should begin immediately.

Institutions should:

• Evaluate the quality and accuracy of institutional data used for state reporting.

• Review current retention, graduation, workforce, and completion metrics.

• Engage legislators and the Alabama Commission on Higher Education (ACHE) during the rulemaking process.

• Monitor meetings of the Outcomes-Based Funding Coordinating Committee and participate in public comment opportunities.

• Begin developing strategies to demonstrate institutional impact using reliable data.

  
  

HBCU C.A.R.E.S. Will Be Following Every Step

At HBCU C.A.R.E.S., we believe policy should strengthen not disadvantage the institutions that have long produced exceptional outcomes with limited resources. As implementation moves forward, we will continue monitoring the CHEER Act, analyzing proposed funding rules, and helping Alabama's HBCUs and HBCCs understand what these changes mean for their campuses. A comprehensive policy brief with additional analysis and recommendations will be released soon. Because when funding formulas change, understanding the policy is just as important as competing for the dollars.