Idaho students talk about making money off your degree
BETTER RETURNS THAN THE STOCK MARKET OR REAL ESTATE
EMSI analyzed its data to offer several different ways to gauge the return on investment for an Idaho college education:
Cost-benefit ratio: For every dollar students spent on education — and the dollars in lost wages while going to school — they will earn an estimated $3.10. That is based on all types of degrees, from associate’s to Ph.D.
Rate of return: Annual average rate of return on the cost of education is 13.6 percent over a career. In similar EMSI studies, North Carolina showed a 12.4 percent return and Texas 14.5 percent. A 2014 Federal Reserve study pegged the national annual rate of return on a college education at 15 percent.
HOW ALL SCHOOLS BENEFIT STUDENTS OR THE STATE
$791,855 Amount of increased lifetime earnings a student with an Idaho bachelor’s degree will have over a student with just a high school eduction.
$4.1 billion Total economic impact of Idaho colleges and universities, which is 7 percent of the state’s economy.
82,716 Number of jobs that $4.1 billion supports
HOW DO COMMUNITY COLLEGES CONTRIBUTE?
$809.6 million Total economic impact of Idaho’s community colleges, which includes payroll, supplies and other operating cost; student spending; and the impact of alumni working and earning in the state.
12.3% Annual average rate of return for community college students on their education spending.
THE STATE’S BENEFIT
9.4% average annual returnFor every dollar spent, the state gets back $2.70 in increased taxes through higher income and reduced need for government services associated with college-educated people. EMSI says those people typically have less illness, less crime and less unemployment: “Taxpayer dollars are a solid investment that compares favorably with other long-term investments.”
HOW STUDENTS SEE THE BENEFIT
Don Gray: Gray completed his master’s degree in architecture in 2013 and enrolled that fall in law school. Law and architecture combined give him a leg up in getting a job, because architects often face legal questions on compliance with rules and law, he said. He expects to graduate from U of I law school in May and go to work for a Boise law firm in construction law after he passes the bar exam. “I was able to get a job (with) a starting salary that is close to double an entry-level architect,” he said.
Madia Mohammad Mousa: The 20-year-old Boise State University computer science junior comes from Afghanistan. She chose computer science because it offers a “good future,” she said. “Not a lot of girls do it and I want to make a change.” A computer science degree will give her multiple options: “I could work in a company or become a professor teaching in a college. There are lots of ways you can go and lots of way to earn money with the degree you have.”
WHY DID THE STATE BOARD OF EDUCATION DO THIS STUDY?
In past years, individual colleges have done economic impact studies, but this is the first in memory that includes all the publicly supported higher education schools in Idaho.
“I really think it helps make our case that appropriations for higher education are an investment and not an expense,” said Matt Freeman, state board executive director.
For years, colleges and students have watched as a greater share of the cost of higher education was pushed onto tuition as the state dealt with other financial demands, from Medicaid to prisons. This study shows paying for higher education is not just a money-out-the-door proposition, state board leaders say. “This report shows a return on investment the state makes,” Freeman said.
What schools were in the study?
Boise State University, University of Idaho, Idaho State University, Lewis-Clark State College, College of Western Idaho, College of Southern Idaho North Idaho College and Eastern Idaho Technical College.
Who paid for the study?
The EMSI study cost $98,000 and costs were divvied up among the schools, except for Eastern Idaho Technical College, which has a small budget.
Why should you care if you don’t have a student going to college?
A return on investment in higher education means all Idahoans share in the benefits of a better trained workforce, said Carson Howell, state board director of research. It means a more vibrant economy with better jobs and better pay.
(Colleges) benefit society as a whole in Idaho by creating a more prosperous economy and generating a variety of savings through the improved lifestyle of students.
Executive summary, ‘The Economic Value of Idaho Public Colleges and Universities’
What does the study mean by the “social impact” on the state from Idaho’s colleges?
Educated populations are generally less likely to face health problems from drug abuse, alcoholism, smoking and obesity. They are less likely to be involved in crime or be unemployed. Avoiding such problems benefits taxpayers as well as consumers, the study says. People generally will have to spend less money on security systems, health expenses or unemployment costs. EMSI calculates that society got back $5 in cost savings for every dollar spent on Idaho public higher education in 2013-2014.
How did individual colleges fare?
Two schools paid for studies on their own institutions, and paid extra for them. University of Idaho paid $15,000 and College of Southern Idaho paid $9,000.
University of Idaho:
▪ Student annual average rate of return: 14 percent
▪ Taxpayer annual average rate return: 8.2 percent
▪ Societal impact: $4.60 back for every dollar spent on higher education
▪ Total economic impact: $1.1 billion
College of Southern Idaho:
▪ Student annual average rate of return:12.1 percent
▪ Taxpayer annual avgerage rate of of return: 6.9 percent
▪ Societal impact: $5.60 back for every dollar spent on higher education
▪ Total economic impact $255.3 million.
What is EMSI and how did they do the study? EMSI, owned by the job search company Career Builder, began in 2000. It operates from Moscow but is not connected to the University of Idaho. The company has done 1,200 educational economic studies in four countries. EMSI used financial information from colleges, and U.S Bureau of Labor Statistics, Census material and its own matrix. You can see the whole study and the methodology by clicking on this link.
How do colleges affect the economy
From running schools to cashing in on visitors who come to Idaho’s eight public university and colleges, the state reaped an economic impact in 2013-2014. Alumni impact includes students’ better wages and improved business output.
College operations (payrolls, supplies, furniture, etc.)
Business start ups, spinoffs
Source: State Board of Education, EMSI
What do college presidents say?
U of I’s Chuck Staben: A study by University of Idaho of high school seniors’ plans for college released in January shows a third weren’t completely convinced that a college education would get them a higher working wage. “This third-party validation, I think, is pretty convincing,” said Staben, who is seeking to boost the university’s flat-lined enrollment. “I need to keep hammering this point home.”
BSU’s Bob Kustra: EMSI’s study shows that whether you are a student or a taxpayer, you benefit from a higher education system that makes for a stronger, better work force, Kustra said. The 13.6 annual return is based on what Kustra called a “minimal investment” in higher education by the state. Imagine how the number would look if Idaho had invested more, he said.