Changing Lives and Boosting the Economy

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Changing Lives and Boosting the Economy

• The Economic Impact of North Carolinas Community
  Colleges
• H. Martin Lancaster, President
• North Carolina Community College System
• March 2005

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Legacy of Learning

• 1789 North Carolina charters nations first
  public university
• 1958 North Carolina creates Industrial
  Education Centers, customized training
• 1963 North Carolina creates comprehensive
  community college system

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Statewide Partnership for Statewide Study
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Study Components

• Direct Economic Impact
• Return on Investment

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Current Direct Economic Impact

• Statewide, North Carolina had 155.3 billion in
  total earnings in FY 2003.

• North Carolinas community colleges accounted for
  14.6 billion of total statewide earnings, or
  9.4, thanks to income of college employees
  income employees in businesses where colleges
  spend money and the higher income of community
  college alumni in the workforce.

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Return on Investment
What CC Benefits measured

• The student benefits due to higher earnings

• A broad collection of external social benefits
• Medical savings
• Crime savings
• Welfare and unemployment savings

• The return to taxpayers for their support

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Student Benefits

• Student benefits (higher earnings) 13 billion
  (present value of increased future earnings as a
  direct result of a students education)
• Student costs 3.1 billion(tuition and other
  costs paid by students and most importantly
  opportunity cost of time, including earnings
  foregone during schooling)
• Benefits/Costs Ratio 4.2
• Rate of Return 18.6 percent
• Payback Period 7.3 years(time it takes student
  to recoup all costs)

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NC Community Colleges pay back NC students
4.24 in benefits
1 invested in NC Community Colleges

18.6 annual rate of return
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Student BenefitsKey Findings
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Social Benefits

• Social benefits are avoided costs -- the reduced
  burdens on employers and taxpayers generated
  annually as the education level of the workforce
  increases.
• Medical savings 43.0
  million
• Crime savings 67.2 million
• Welfare/Unemployment savings
  73.9 million
• Total 184.1 million

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Return to Taxpayers(conservative estimate)

• Taxpayer Costs State Appropriations plus
  Property Taxes
• Taxpayer Benefits More Taxes Collected
  Social Benefits (avoided costs)
• Benefit/Cost Ratio 2.7
• Rate of Return 16.8 percent
• Payback Period 7.7 years

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NC Community Colleges pay back NC taxpayers
2.74 in benefits
1 invested in NC Community Colleges

16.8 annual rate of return
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Thanks to North Carolinas Community Colleges...
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Changing Lives and Boosting the Economy

• The Economic Impact of North Carolinas Community
  Colleges
• H. Martin Lancaster, President
• North Carolina Community College System
• March 2005