New report shows community college yields solid ROI for economy and students

WASHINGTON, Feb. 18, 2014 /PRNewswire-USNewswire/ -- Today the American Association of Community Colleges (AACC) released a new report, "Where Value Meets Values: The Economic Impact of Community Colleges," showing that community colleges are a boon to the American economy at large and to the individual student.

In 2012 alone, the net total impact of community colleges on the U.S. economy was $809 billion in added income, equal to 5.4 percent of GDP. Over time, the U.S. economy will see even greater economic benefits, including $285.7 billion dollars in increased tax revenue as students earn higher wages and $19.2 billion in taxpayer savings as students require fewer safety net services, experience better health, and lower rates of crime.

Students also see a significant economic benefit. For every one dollar a student spends on his or her community college education, he or she sees an ROI of $3.80.

"These data prove that not only are community colleges instrumental in helping students reclaim the American Dream, they are vital to the economic viability of the nation," said AACC President and CEO Walter G. Bumphus. "We hope that when policymakers see the outstanding return on investment that community colleges provide, they will deliver the support these institutions need to continue the mission of education for economic mobility."

U.S. community colleges by the numbers:

$809 billion

• The net total impact of community colleges on the U.S. economy in 2012 was $809 billion in added income, equal to 5.4 percent of GDP.

$285.7 billion

• Federal, state, and local governments will collect an additional $285.7 billion in the form of higher tax receipts as students earn higher wages.

$19.2 billion

• Improved lifestyles of students lead to lower health care costs, reduced crime, and lower need for safety net programs, resulting in a savings of $19.2 billion in taxpayer savings over students' careers.

$6.80

• Every dollar of public money spent on community colleges yields a cumulative return of $6.80 over the course of students' careers, or an ROI of $5.80.

$4.80

• Students receive a cumulative of $4.80 in higher future wages for every dollar they spend on their community college education, or an ROI of $3.80.

17.8 percent

• The internal rate of return for the financial investment community college students make in their educations is 17.8 percent.

14.3 percent

• In 2012, U.S. taxpayers paid $44.9 billion to support community colleges. Taxpayers saw a 14.3 percent internal rate of return on this investment.

"Americans want and deserve proof that higher education offers real opportunity and a true return on their investment," said Jane Karas, chair of the AACC Board of Directors. "I'm proud to say that there is a cumulative return of $6.80 for every dollar of public money spent on community colleges."

Economic Modeling Specialists International (EMSI) conducted the report on behalf of AACC. Gabriel Rench, Team Leader, and Annike Crapuchettes, Assistant Vice President of Professional Services from EMSI are available to explain the methodology and answer specific questions. 

Read the full economic impact report and explore fact sheets on the topics it covers online at http://www.aacc.nche.edu/economicimpact.

As the voice of the nation's community colleges, the American Association of Community Colleges (AACC), delivers educational and economic opportunity for 13 million diverse students in search of the American Dream. Uniquely dedicated to access and success for all students, AACC's nearly 1,200 member colleges provide an on-ramp to degree attainment, skilled careers and family-supporting wages. Located in Washington, D.C., AACC advocates for these not-for-profit, public-serving institutions to ensure they have the resources and support they need to deliver on the mission of increasing economic mobility for all. 

SOURCE American Association of Community Colleges