FOR IMMEDIATE RELEASE - January 22, 2009

HECB report lists wide-ranging benefits of higher education investment

     OLYMPIA - Public investment in higher education yields returns that significantly benefit society by lowering reliance on social services, cutting crime, enhancing community involvement, and increasing family income - not only for college graduates, but for people with lower levels of educational attainment, according to findings in a new report from the Higher Education Coordinating Board (HECB).

     The report also finds that children of parents with college degrees are less likely to live in households that utilize food stamps or assistance from state and federal welfare programs. This college effect applies in both single- and two-parent households.

     “This report is strong evidence that public investment in higher education results in rewards for all taxpayers, not just those who earn college degrees or certificates,” said HECB Executive Director Ann Daley. “At a time when state policymakers must carefully weigh priorities in light of the current fiscal crisis, it is important to recognize the significant returns on investment that higher education creates for our citizens and Washington’s economy.” 

     The report, titled “The Benefits of Higher Education: Return on Investment,” outlines four categories of higher education returns: creating a strong economy, increasing personal earnings and benefits, reducing social costs, and creating a more engaged citizenry.

     The report includes research by the HECB, which found that:

• About 24.2 percent of Washington citizens aged 25-64 who had earned a high school degree or less needed federal or state welfare assistance in 2007, compared to 8.2 percent who had earned a bachelor’s degree.
• About 13.9 percent of Washington citizens in the 25-64 age category who had earned a high school diploma were covered by Medicaid or other Department of Social and Health Services Medical Assistance Administration program in spring 2008, compared to 1.8 percent who had earned a bachelor’s degree.
• Approximately 6.4 percent of Washington citizens in the same age category who had a high school degree or less in spring 2008 were unemployed, compared to 2.5 percent who had a bachelor’s degree.

     The report also cites a national study which found that both personal voting behavior and volunteerism increase as the level of postsecondary education goes up.

     The report found that public investments in higher education produce both immediate and long-term benefits for the state economy. For example, in the short term, community and technical college operations contributed an estimated $86.1 million in labor and non-labor income to the economy in 2004, after adjusting for taxes and other withdrawn monies.

     In the long term, higher-education investments also stimulate the economy by serving as an incubator for new businesses in science, technology, and other high-paying fields.

     Although it is not surprising that jobs requiring a college degree tend to pay higher salaries than those requiring less education, income increases dramatically for those who have earned a master’s degree or above. In addition, one study has determined a greater proportion of college-educated workers in a given population results in higher wages for other sectors of the population as well. 

     The report notes that during earlier fiscal crises, state policymakers sometimes have chosen to slash higher education funding as a way to address budget shortfalls. Higher education constitutes the largest non-mandatory category of spending by state government.

     However, such solutions arguably fail to recognize the long-term recuperative effects of higher-education spending in the economy, the report states. “Rather than view the higher education budget as a ‘rainy day fund’ to be used in solving the immediate crisis, it can also be seen as a tool for achieving long-term economic success and stability,” the report states.

     The draft report will be presented to the HECB at its monthly meeting Friday Jan. 23 in Olympia. It is available on line at: www.hecb.wa.gov/boardmtgs/documents/TAB8-BenefitsofInvesting.pdf.

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For more information: Gary Larson

(360) 753-7817 or garyl@hecb.wa.gov