The Economic Impact of Higher Education

Posted by Robert E. Johnson, Ph.D. on 11.16.10 in Education, Future, Students, Uncategorized

Last Thursday, 43 prospective students, who had gathered on the Worcester campus for Decision Day, opened acceptance letters that read, “Congratulations! You have been accepted to Becker College.” It was a moving experience, filled with smiles, hugs and calls and texts to expectant family and friends.

With this joyous news comes sobering reality; the bill. While college tuition is frequently in the news, the news is not all bad. A recent College Board study reported, “…average net tuition and fees remain lower in inflation-adjusted dollars than they were five years ago,” and “An unprecedented increase in the federal Pell grant program for low- and moderate-income students in 2009-10 led to a decline in net price for 2009-10, despite relatively large increases in published prices.”

There is no question that the cost of higher education is a challenge to students and their families. We should not forget, however, that for most, for hundreds of years, the dream of pursuing an education has always been worth sacrifice. As a young man in Detroit, I was the first in my family to attend college. I worked my way through college, as I know many of our students do. Becker College alumni Len Gengel ’84, Colleen Barrett ’64, Gil Boutin ’39, and many more, sacrificed to earn their degrees, went on to build successful careers and have given back, so that future generations of Becker students may have the same chances.

Return on investment—ROI—is a term that is rapidly moving from corporate boardrooms and into the mainstream. Some of you may have evaluated colleges based on their potential ROI. I hope these examples from the College Board report will reassure you:

  • The average annual income for high school dropouts is $17,299. And the average annual income for graduates with a bachelor’s degree is $52.671. (U.S. Bureau of the Census, 2006)
  • Individuals with higher levels of education are less likely to experience unemployment regardless of race, ethnicity or gender. While the recession has swelled the unemployment rate, regardless of education, the rate is still lower for those with a bachelor’s degree than those with a high school diploma.
  • The increased earning power of a college education is worth about $450,000 in today’s dollars. (Baum and Ma, 2007)
  • If the approximately 1.2 million high school dropouts from the class of 2008 had earned diplomas along with their classmates, the nation’s economy could have benefited from an additional $319 billion in income over their lifetimes. (Alliance for Excellent Education. 2008)
  • Educated individuals are also more likely to volunteer, vote and raise healthier better educated children. (Baum and Ma. 2007; Wolfe and Haveman. 2002)

It is my priority to deliver a quality ROI on your Becker education. I am excited to see how the Becker community has joined me in this effort, and every day I look forward to working on new ways to make raise the value of your education.

About the Author: Robert E. Johnson, Ph.D.

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One Response to The Economic Impact of Higher Education

  1. Jay Lacke says:

    Excellent, excellent piece! I strongly recommend the article, “The Role of Cognitive Skills in Economic Development” by Eric A. Hanushek and Ludger Wößmannk with Ludger Wößmann, published In: Journal of Economic Literature, September 2008. This work has been built on recently. The role of improved schooling, a central part of most development strategies, has become controversial because expansion of school attainment has not guaranteed improved economic conditions. This paper reviews the role of cognitive skills in promoting economic well-being, with a particular focus on the role of school quality and quantity. It concludes that there is strong evidence that the cognitive skills of the population – rather than mere school attainment – are powerfully related to individual earnings, to the distribution of income, and to economic growth. New empirical results show the importance of both minimal and high level skills, the complementarity of skills and the quality of economic institutions, and the robustness of the relationship between skills and growth. International comparisons incorporating expanded data on cognitive skills reveal much larger skill deficits in developing countries than generally derived from just school enrollment and attainment. The magnitude of change needed makes clear that closing the economic gap with developed countries will require major structural changes in schooling institutions.

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