Release: August 14, 2003
Residents, Students Get ‘Bang for Buck’ from Community Colleges
Maryland’s 16 community colleges help to pump about $5.6 billion annually into the state economy and provide a healthy return on the investment of state and local taxpayer dollars into their operations. Moreover, students get a significant boost in earning power from their community college education, resulting in a 24 percent return on their tuition and college costs.
These are among the conclusions of a newly released socioeconomic benefits study commissioned by the Maryland Association of Community Colleges and conducted by CC Benefits, Inc., an economic research firm based in Idaho. Presidents and leaders from Maryland’s community colleges were joined by a variety of county and state officials in unveiling the study this week, during the Maryland Association of Counties summer conference in Ocean City, Maryland.
One key finding of the study is that Maryland residents realize a return of approximately $15 for each dollar of state and local funding invested in the community colleges. This includes the value of all benefits to the state, as a result of higher earnings, enhanced productivity, lower social costs, and a higher quality of living. Benefits include reduced crime, less unemployment, reduced welfare and improved health.
If only increased tax revenues and lower expenditures to state and local governments are considered, taxpayers still realize $2.06 for each dollar invested in the community colleges, with an 11.9 percent rate of return. The study notes that all of the public investment is recovered in just over 10 years.
State and local governments allocated $459 million to supporting Maryland’s community colleges in 2002. State aid to community colleges accounted for approximately 1 percent of the overall state budget.
“It’s clear that all Marylanders, and certainly the students we serve, get a tremendous bang for the buck from the investments they make in their community colleges,” said Dr. Pat Stanley, president of Frederick Community College and this year’s chair of the Maryland Council of Community College Chief Executive Officers.
“At a time when thousands of Maryland families and their government must scrutinize the spending of every dollar, this study provides the tools to evaluate the returns from investing in community colleges,” said Dr. Anthony G. (Tony) Kinkel, executive director of MACC. “It analyzes return on investment for both taxpayers and students, and the results solidly indicate that our community colleges provide high value on both accounts.”
Maryland’s community colleges contribute to the state through the operations and employment at the schools, and also through the increased earnings of students, which multiply throughout the economy. Their estimated $5.6 billion contribution to the annual economy, overall, represents 4.2 percent of the state’s business activity. The direct impact of community colleges’ annual operations contributed $755 million to the state’s economy in 2002.
“With Maryland’s economy just beginning to show signs of recovery, it is prudent for government, business, and individuals to consider the consequences of investment of state and local funds in community colleges. Fully funding community colleges could be a way to help the state grow its way out of the current budget problems,” emphasized Kinkel.
Students themselves reap returns of $5.65 for each dollar invested in their community college tuition, earning $4,499 more annually for each additional year of full time enrollment. According to the study, students recover all their costs of that education -- including foregone wages during their attendance -- in 5.9 years.
Maryland’s community colleges now enroll more than half of all the undergraduate students in the state’s institutions of higher education. And of all the recent growth in first-time, full-time freshmen students around the state, nearly two-thirds of them began at community colleges. The average annual cost of tuition and fees for a Maryland resident enrolled full-time at a local community college was $2,209 during fiscal year 2003, less than half the average of $5,145 for students attending Maryland’s four-year public colleges and universities.
The American Association of Community College Trustees (ACCT) funded the creation of the initial CC Benefits model for evaluating the economic impact of community colleges. It was unveiled at the 2001 ACCT national convention, as a means to generate comprehensive cost benefit analyses for community colleges. Since that time it has been field-tested on more than 220 institutions across the country.
The study uses elaborate census information and detailed facts about each of the 16 community colleges in Maryland to create specific economic and socioeconomic data. It is based on a return-on-investment concept widely used in economic and business studies. It also provides results in terms of payback periods and multiplier effects for students and taxpayers.
The Maryland Association of Community Colleges is the organization representing Maryland’s 16 community colleges. Its mission is to develop and executive a strategic direction for the community colleges. MACC seeks to provide leadership and advocacy on behalf of the institutions to the state legislature, other branches of government, and the community as a whole.
For further information or a copy of the study, please call Barbara Ash, MACC research director, at 410-974-8117 or email: . Or log on to the MACC web site at: .
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