Coast Community College District: Investment in a College Education
April 11, 2016
INVESTMENT IN COMMUNITY COLLEGE EDUCATION YIELDS 13.3 PERCENT RETURN – A FIGURE BETTER THAN THE 10-YEAR AVERAGE OF THE U.S. STOCK MARKET
Coast Community College District Releases Results of Economic Value Study Demonstrating the Return on Investment and Economic Impact of Education in Orange County
COSTA MESA, Calif., April 11, 2016 – World markets may be tumbling following the lackluster performance of Wall Street, but investment in a college education offers a solid bull run. According to a new report commissioned by Coast Community College District, for every $1 students invest in CCCD in the form of out-of-pocket expenses and forgone time and money, they receive a cumulative of $3.30 in higher future wages. Researchers discovered the average annual rate of return for students was 13.3 percent – compared to the 10-year, 7.2 percent average return of the U.S. stock market.
“The district plays an incomparable role in helping students increase their employability and achieve their potential,” said Gene Farrell, chancellor of CCCD. “This study quantifies what administers, educators and students have known all along: CCCD provides students with the skills they need to have a fulfilling and prosperous career. Plus, we offer them an environment to meet people, increase their self-confidence, and promote their overall health and well-being.”
The study conducted by Economic Modeling Specialists International concluded that CCCD is a high-performing investment for students, California taxpayers, and California’s economy. EMSI also measured gross regional product (GRP) to develop an economic impact analysis on Orange County. Data analyzed spanned CCCD’s 2013-14 fiscal year.
Study Sizes Up ROI of a CCCD Education
Even by EMSI’s conservative estimates, the results of this landmark study demonstrate that CCCD creates value from multiple perspectives by tracking the benefits to students, taxpayers and society.
Students: Data indicated that CCCD enriches the lives of students by raising their lifetime incomes and achieving a lifetime potential probably unattainable without education from the multicollege district, which includes Coastline Community College, Golden West College and Orange Coast College.
“For example, the average associate degree completer will see an increase in earnings of $12,300 each year compared to someone with a high school diploma or equivalent,” Farrell pointed out. “Over a working lifetime, this increase in earnings puts an additional income of approximately $492,000 into students’ pockets. This figure can be life-changing.”
Taxpayers: EMSI determined that for every $1 of public money invested in CCCD, taxpayers receive a cumulative value of $3.90 over the course of students’ working lives. The average annual rate of return is 14.5 percent, an investment that compares favorably with other long-term assets in private and public sectors. All of these benefits will generate a present value of $43.8 million in savings to state and local taxpayers.
As Farrell explained, “We know education is statistically correlated with lifestyle changes that generate taxpayer savings in health, crime and unemployment costs. Improved health habits lower students’ need for national health care services. They’re less likely to commit crimes, so the burden on law enforcement and criminal justice services is less. And simply put, students are more employable, so they’re less dependent upon welfare and unemployment benefits.”
Society: California also gains because CCCD helps to create a more prosperous economy and generates a variety of savings through the improved lifestyles of students, according to study authors. For as long as students from the fiscal year studied remain in the state workforce, for every dollar that the public invests, California receives a cumulative value of $14.50 in benefits, EMSI found.
“Plus, Orange County businesses benefit through increased consumer spending in the region and a steady influx of qualified, trained workers into the workforce,” Farrell said.
CCCD Promotes Economic Growth in Orange County
The overall impact of CCCD on the local business community during the analysis year amounted to $2.2 billion in GRP, a measurement of the market value of all final goods and services produced within a metropolitan area in a given period of time. EMSI notes that by comparison, the GRP contribution the District provides is as large as the entire utilities industry in the county.
“The District is an economic engine in Orange County,” Farrell said. “We’re not only an employer and buyer of goods and services, the living expenses of students benefit local businesses. Plus, Orange County employers look to CCCD-educated students to satisfy their workforce development needs.”
To develop its economic growth analysis, EMSI measured the impact of operations spending, student spending and alumni.
Operations Spending
Student Spending
Alumni Impact
The study is the first of its kind in the region. Previous studies commissioned by Orange County-based community college districts – North Orange County Community College District, Rancho Santiago Community College District, Santa Ana College and South Orange County Community College District – date back to 2005. Those studies examined economic impact but did not cover the return on investment metrics reviewed in this CCCD-sponsored research.
About Coast Community College District
The Coast Community College District is headquartered in Costa Mesa and is the ninth largest district in the country. The District’s three colleges—Coastline Community College in Fountain Valley, Golden West College in Huntington Beach and Orange Coast College in Costa Mesa— serve over 60,000 students annually, providing traditional degree and transfer opportunities, career and technical training, basic skills, English as a Second Language and other community programs.
Coast Community College District Releases Results of Economic Value Study Demonstrating the Return on Investment and Economic Impact of Education in Orange County
COSTA MESA, Calif., April 11, 2016 – World markets may be tumbling following the lackluster performance of Wall Street, but investment in a college education offers a solid bull run. According to a new report commissioned by Coast Community College District, for every $1 students invest in CCCD in the form of out-of-pocket expenses and forgone time and money, they receive a cumulative of $3.30 in higher future wages. Researchers discovered the average annual rate of return for students was 13.3 percent – compared to the 10-year, 7.2 percent average return of the U.S. stock market.
“The district plays an incomparable role in helping students increase their employability and achieve their potential,” said Gene Farrell, chancellor of CCCD. “This study quantifies what administers, educators and students have known all along: CCCD provides students with the skills they need to have a fulfilling and prosperous career. Plus, we offer them an environment to meet people, increase their self-confidence, and promote their overall health and well-being.”
The study conducted by Economic Modeling Specialists International concluded that CCCD is a high-performing investment for students, California taxpayers, and California’s economy. EMSI also measured gross regional product (GRP) to develop an economic impact analysis on Orange County. Data analyzed spanned CCCD’s 2013-14 fiscal year.
Study Sizes Up ROI of a CCCD Education
Even by EMSI’s conservative estimates, the results of this landmark study demonstrate that CCCD creates value from multiple perspectives by tracking the benefits to students, taxpayers and society.
Students: Data indicated that CCCD enriches the lives of students by raising their lifetime incomes and achieving a lifetime potential probably unattainable without education from the multicollege district, which includes Coastline Community College, Golden West College and Orange Coast College.
- The total investment made by CCCD’s 58,929 credit students and 1,439 noncredit students in fiscal year 2013-14 amounted to $440.5 million, equal to $62.7 million in out-of-pocket expenses plus $377.8 million in forgone time and money. EMSI factored costs for tuition, fees, books and supplies as students’ expenses. Researchers also considered the income students would have earned by working instead of attending college.
- EMSI estimates that CCCD’s students will receive a stream of higher future wages that will continue to grow through their working lives in return for their investment.
“For example, the average associate degree completer will see an increase in earnings of $12,300 each year compared to someone with a high school diploma or equivalent,” Farrell pointed out. “Over a working lifetime, this increase in earnings puts an additional income of approximately $492,000 into students’ pockets. This figure can be life-changing.”
Taxpayers: EMSI determined that for every $1 of public money invested in CCCD, taxpayers receive a cumulative value of $3.90 over the course of students’ working lives. The average annual rate of return is 14.5 percent, an investment that compares favorably with other long-term assets in private and public sectors. All of these benefits will generate a present value of $43.8 million in savings to state and local taxpayers.
As Farrell explained, “We know education is statistically correlated with lifestyle changes that generate taxpayer savings in health, crime and unemployment costs. Improved health habits lower students’ need for national health care services. They’re less likely to commit crimes, so the burden on law enforcement and criminal justice services is less. And simply put, students are more employable, so they’re less dependent upon welfare and unemployment benefits.”
Society: California also gains because CCCD helps to create a more prosperous economy and generates a variety of savings through the improved lifestyles of students, according to study authors. For as long as students from the fiscal year studied remain in the state workforce, for every dollar that the public invests, California receives a cumulative value of $14.50 in benefits, EMSI found.
“Plus, Orange County businesses benefit through increased consumer spending in the region and a steady influx of qualified, trained workers into the workforce,” Farrell said.
CCCD Promotes Economic Growth in Orange County
The overall impact of CCCD on the local business community during the analysis year amounted to $2.2 billion in GRP, a measurement of the market value of all final goods and services produced within a metropolitan area in a given period of time. EMSI notes that by comparison, the GRP contribution the District provides is as large as the entire utilities industry in the county.
“The District is an economic engine in Orange County,” Farrell said. “We’re not only an employer and buyer of goods and services, the living expenses of students benefit local businesses. Plus, Orange County employers look to CCCD-educated students to satisfy their workforce development needs.”
To develop its economic growth analysis, EMSI measured the impact of operations spending, student spending and alumni.
Operations Spending
- Of the 2,304 full-time and part-time faculty and staff employed in fiscal year 2013-14, 85 percent lived in Orange County. Total payroll topped $179.5 million, much of which was spent in the region for groceries, rent, eating out, clothing and other household expenses.
- CCCD is itself a large-scale buyer of goods and services, spending $124.5 million to cover its expenses for facilities, professional services and supplies.
- Its day-to-day operations alone equaled $265.2 million of the $2.2 billion in GRP.
Student Spending
- While attending CCCD, these students spent $389.4 million to purchase groceries, rent accommodation, pay for transportation and other expenses.
- Student expenditures generated $313.3 million in GRP in the county economy.
Alumni Impact
- During the analysis year, past and present students of CCCD generated $1.6 billion in GRP for the county. This figure represents the higher income they earned, increased output of the businesses that employed them as well as the multiplier effects that occurred as students and their employers spent money at other companies.
The study is the first of its kind in the region. Previous studies commissioned by Orange County-based community college districts – North Orange County Community College District, Rancho Santiago Community College District, Santa Ana College and South Orange County Community College District – date back to 2005. Those studies examined economic impact but did not cover the return on investment metrics reviewed in this CCCD-sponsored research.
About Coast Community College District
The Coast Community College District is headquartered in Costa Mesa and is the ninth largest district in the country. The District’s three colleges—Coastline Community College in Fountain Valley, Golden West College in Huntington Beach and Orange Coast College in Costa Mesa— serve over 60,000 students annually, providing traditional degree and transfer opportunities, career and technical training, basic skills, English as a Second Language and other community programs.
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