Assessing the Financial Value of our Community Colleges

Assessing the Financial Value of our Community Colleges

November 14, 2005

I have to read a lot of reports, position papers and issue briefings as a college trustee. Sad to say, much of that material is not worth the paper it’s written on. That’s why I was so pleased to get an advance copy of UCB economics researcher Kevin Stange’s forthcoming report entitled “The Economic Impact of the Foothill-De Anza Community College District and its Students,” which was commissioned by our visionary Chancellor, Dr. Martha Kanter.

Chancellor Kanter plans to release the full report shortly. But in the meantime, here is what I find so exciting about this document. First, Stange’s work makes it clear that it is possible to measure the economic impact of our community colleges. Now, we all know that education has great value. But exactly how can we quantify that value? Stange did so, in part, by measuring the increase in earnings students who stay in our area gain by taking college-level classes and by earning certificates of completion or degrees. Not surprisingly, increasing the level of education in a community boosts the cumulative earning power of that community. More specifically, Stange found, after correcting the data for a variety of factors, that Foothill and De Anza community college alumni earn an additional $1.21 annually for each dollar our community colleges invest in their education. When you throw in the multiplying effect of spending by our two community colleges themselves on the local region, and the money drawn into our area by that spending (for example, by the state sending tax money back to us to support our colleges), the figures show that our region derives more than $3.50 in additional economic activity for each buck we raise through our property taxes to support Foothill College and De Anza College. That money then circulates in our area, where it creates still more spending, jobs and economic opportunity. That’s one of the reasons “college towns” are usually prosperous places, wherever they are located.

Put more simply, by making it possible for local residents to improve their lives and gain new skills we build a stronger and more prosperous community, with better wages and a financial base that can support a higher level of community services. That lesson was clear to the authors of our state’s original 1960 Master Plan for Higher Education, who argued – and then proved – that providing affordable high-quality higher educational opportunities was a great way to grow a strong economy. My hope is that the release of Stange’s report will lead to a renewal of that once common understanding, along with a fresh commitment to making that vision a reality once again. I’ll post a link to the full report once it is released (UPDATE: Here is the link to the report in .pdf format).

About the Author /

My published work since 1985 has focused mostly on public policy, technology, science, education and business. I’ve written more than 600 articles for a variety of magazines, journals and newspapers on these often interrelated subjects. The topics I have covered include analysis of progressive approaches to higher education, entrepreneurial trends, e-learning strategies, business management, open source software, alternative energy research and development, voting technologies, streaming media platforms, online electioneering, biotech research, patent and tax law reform, federal nanotechnology policies and tech stocks.

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