Alabama's CHEER Act Passes the House Here's What HBCU Leaders Need to Know

On March 11, 2026, the Alabama House of Representatives moved forward one of the most significant shifts in higher education funding policy the state has seen in years. The College and Higher Education Excellence and Results (CHEER) Act House Bill 565 passed out of the House Ways and Means Education Committee as a reported substitute, and it is heading toward a full vote that every HBCU and HBCC leader in Alabama needs to be watching closely.

At HBCU C.A.R.E.S., our mission is to turn policy into action and research into opportunity for our member institutions and the students they serve. So let's break down exactly what the CHEER Act does, what the amendments mean, and what it could mean for your institution.

What Is the CHEER Act?

The CHEER Act creates a new outcomes-based bonus funding program for Alabama's public higher education institutions. It establishes the College and Higher Education Excellence and Results (CHEER) Fund a dedicated fund in the State Treasury and a new Outcomes-Based Higher Education Funding Coordinating Committee to govern it.

The core idea is straightforward: institutions that meet defined student and institutional performance goals earn bonus funding on top of their base appropriations. Institutions that don't hit their targets don't earn the bonus and that money stays in the fund to be redistributed to institutions that do.

The program is set to launch October 1, 2026, contingent on legislative appropriation.

Who Is Eligible?

The bill names specific eligible institutions, including:

• Alabama A M University

• Alabama State University

• Athens State University

• Auburn University and Auburn University at Montgomery

• Jacksonville State University

• Troy University

• University of Alabama system (Birmingham, Huntsville, Tuscaloosa)

• University of Montevallo, North Alabama, South Alabama, West Alabama

• Tuskegee University

• All community and technical colleges within the Alabama Community College System

The inclusion of Tuskegee University and the full Alabama Community College System which includes Alabama's Historically Black Community Colleges means that nearly every HBCU and HBCC in the state is eligible to participate.

What Are Institutions Being Measured On?

This is where the detail matters. The CHEER Act establishes four performance outcome categories that determine bonus funding eligibility:

1. Student Success

• Postgraduation success including employment in a high-wage job, employment in a high-demand field, and continued enrollment

• Adult learner outcomes (students 25 and older)

• Completion rates

• Higher-need student outcomes including low-income students (Pell Grant recipients), academically underprepared students, and adult learners

• "Some college, no degree" re-engagement

• Student retention rates

2. Alignment with Economic Development and Workforce Needs

• Certificate and degree production in high-demand fields

• Earning power of graduates

3. Research

• Increased research expenditures

• Receipt of additional federal matching funds

• Applies specifically to Premier Research Universities defined as institutions with more than $100 million in annual external grants and contracts

4. Innovation

• Use of methodologies and practices that remove barriers to degree and certificate completion

Each category carries a weighted percentage, and institutions earn or lose bonus funding category by category. Meeting a goal means earning that slice of available funding. Missing it means forfeiting it those dollars stay in the pool for other institutions.

What the Substitute Amendment Changes

The House Ways and Means Education Committee introduced a reported substitute meaning this is not the original bill language but an amended version. Key provisions to note in the substitute:

The Premier Research carve-out is formalized. Premier Research Universities those exceeding $100M in external grants have a separate certification pathway. They report every five years to committee chairs and receive their research-category bonus funding through direct legislative appropriation rather than through ACHE administration. This gives Alabama's largest research universities a distinct lane while keeping ACHE as the central distribution point for all other institutions.

Data integrity is treated as a condition of eligibility not just a rule. The substitute makes clear that if an institution is found to have manipulated its data to generate bonus funding, it loses not just the current year's bonus for that category but potentially faces future funding reductions as well. This is a significant accountability provision.

The existing outcomes-based program is fully superseded. Section 2 explicitly replaces the prior outcomes-based funding program for community colleges established under Act 2017-217. HBCCs that have been operating under the old framework will need to understand how their current metrics translate under CHEER.

Compliance with a companion bill is required. Institutions must also comply with a separate 2026 bill requiring annual reports on state and federal funds received, expended, and plans for managing funding reductions. That companion measure adds another accountability layer that institutions should be preparing for now.

Why This Matters Specifically for HBCUs and HBCCs

Outcomes-based funding models are not new and they have a complicated history at institutions that serve higher concentrations of students who face systemic barriers to completion and postgraduation success. HBCUs and HBCCs disproportionately serve low-income students, first-generation students, adult learners, and academically underprepared students exactly the populations that outcomes-based models can either lift up or penalize, depending on how the weights are set. Here is the opportunity: the CHEER Act specifically creates bonus categories for higher-need students. Institutions that serve and successfully graduate Pell-eligible students, adult learners, and academically underprepared students can earn bonus funding for doing that work well. That is a meaningful acknowledgment that equity-focused institutions deserve credit not penalties for the students they serve.

Here is the caution: the weights for each category are set by the Outcomes-Based Higher Education Funding Coordinating Committee a body composed primarily of legislative leaders and system representatives. HBCUs and HBCCs must have a voice in shaping how those weights are assigned. An outcomes framework that over-weights graduate wage outcomes without adequately weighting higher-need student success could systematically disadvantage institutions serving the students who need the most support.

What HBCU C.A.R.E.S. Is Watching

As your consortium, HBCU C.A.R.E.S. will be monitoring the following as HB565 moves forward:

• How the performance weights are ultimately assigned which categories carry more bonus value and whether equity-focused metrics are given meaningful weight

• The composition and decisions of the Outcomes-Based Funding Coordinating Committee and whether HBCU and HBCC perspectives are represented in its work

• How "high-demand field" and "high-wage job" are defined these definitions directly shape what programs and graduates count, and rural and HBCU-adjacent labor markets must be accounted for

• Implementation timeline and readiness support the program launches October 1, 2026, which is months away; institutions need time and technical assistance to build the data infrastructure required

  
  

We will publish a follow-up policy brief once the bill receives a full House vote and moves to the Senate. In the meantime, HBCU C.A.R.E.S. member institutions should begin reviewing their current outcomes data and assessing their readiness to participate in the CHEER program from day one.

The Bottom Line

The CHEER Act represents both a genuine opportunity and a real policy risk for Alabama's HBCUs and HBCCs. Done right with meaningful weight given to higher-need student success and with HBCU voices shaping the outcome categories this framework could direct additional state investment toward the institutions doing the hardest and most important work in Alabama higher education.

Done carelessly, it could become another funding structure that rewards institutions already operating from positions of advantage while under-resourcing the institutions that serve students who have the fewest alternatives.

HBCU C.A.R.E.S. will be in the room. We will be watching the data. And we will be advocating loudly, specifically, and with evidence for an outcomes framework that reflects what our institutions actually do and the students they actually serve.

For the full text of HB565 / JPLG8FF-1, visit the Alabama Legislature's ALISON system at alison.legislature.state.al.us.