Return on Investment: The Economic Impact of Texas Community Colleges

External research consistently shows that programs and services offered by community colleges bring an impressive return on investment. The following points are taken from various reports and findings.

Texas Comptroller's Office

The Texas Comptroller of Public Accounts estimates the impact of community and technical colleges on the total state economy as $2.1 billion annually from out-of-state money into Texas (out-of-state tuition, federal grants to students, federal contracts with community colleges) and $10.1 billion annually from the earnings of all Texans with associate degrees. (Source: Texas Comptroller’s Office, “Texas Works 2008: Training and Education for All Texans.” December 2008)

A Texan with an associate degree can earn up to 4.9 times as much over five years as he/she would in a “baseline” alternative occupation not requiring higher education. The comptroller estimates that associate degree graduates earn an average of 32 percent more than high school graduates. (Source: Texas Comptroller’s Office, “Texas Works 2008: Training and Education for All Texans.” December 2008)

As a result of these impacts, all Texas communities reap the benefits of community colleges. Some benefit directly, as local schools attract industry, provide jobs, and train productive workers. Other communities without schools benefit indirectly, as students trained elsewhere return home with new skills, knowledge, and opportunities. (Source: Texas Comptroller’s Office, “Texas Works 2008: Training and Education for All Texans.” December 2008)

Higher education leads to social benefits that reduce the public economic burden all Texans face. As students complete more years of education, for instance, their likelihood of criminal activity decreases, leading to lower incarceration rates and less state spending on criminal justice. Higher levels of educational attainment also bring more employment opportunities and are associated with lower unemployment. (Source: Texas Comptroller’s Office, “Texas Works 2008: Training and Education for All Texans.” December 2008)

The average Texan with an associate degree will break even on his/her educational investment just beyond the first year of post-graduation employment. (Source: Texas Comptroller’s Office, “Texas Works 2008: Training and Education for All Texans.” December 2008)

Students with an associate degree make an average of $340,000 more in lifetime earnings than someone with only a high school diploma, and almost $600,000 more than a worker with no high school diploma. (Source: Texas Comptroller’s Office, “Texas Works 2008: Training and Education for All Texans.” December 2008)

Texas Higher Education Coordinating Board

The state’s return on its investment in higher education is estimated at $8.08 for every $1 invested. (Source: Texas Higher Education Coordinating Board, www.thecb.state.tx.us)

“Research has consistently shown that higher education is beneficial not only to individuals, but also to society. These benefits are many and varied, ranging from improved health and financial prospects for individuals to a more productive workforce and less demand for social services by society. The gains from a more educated populace promote long-term economic development, and enhanced research activity spawns new and innovative advances in multiple arenas.” (Source: The Perryman Group, “A Tale of Two States—And One Million Jobs!!” March 2007)

Texas college and university enrollments increased more than 8 percent from fall 2008 to fall 2009, for a total of 1.3 million students. The increase is the largest single increase from year-to-year enrollment in Texas. Seventy-five percent of the reported growth is attributed to public two-year college enrollment. (Source: Texas Higher Education Coordinating Board, Texas Higher Education Data)

Bureau of Labor Statistics

Among education and training categories, the associate degree is the fastest growing occupational credential. (Bureau of Labor Statistics, Employment Projections: 2008-2018 Summary)

The number of jobs for workers who had some college education but not a bachelor’s degree will increase from more than 46 million, or 30 percent of the workforce, in 2006 to about 51 million by 2016. That’s a growth rate of almost 11 percent. (Bureau of Labor Statistics, Occupational Outlook Quarterly. Fall 2008)

CCBenefits Inc.

“Taxpayers see a real money ‘book’ return of 15.9% on their annual investments in the community colleges and recover all investments in 8.2 years.” (Source: Kjell A. Christophersen and M. Henry Robinson, CCBenefits Inc. “Community Colleges Working for Texas: The Socioeconomic Benefits Generated by 50 Community College Districts in Texas.” June 2002)

“Students enjoy an attractive 26.1 percent annual return on their investment of time and money—for every $1 the student invests in a college education, he or she will receive a cumulative $9.05 in higher future earnings over the next 30 years.” (Source: Kjell A. Christophersen and M. Henry Robinson, CCBenefits Inc. “Community Colleges Working for Texas: The Socioeconomic Benefits Generated by 50 Community College Districts in Texas.” June 2002)