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Four institutions provide impressive return on investment and support one of every eight jobs in Larimer and Weld
The four public colleges and universities in Northern Colorado added $3.9 billion in income to the economy of Larimer and Weld Counties and supported one of every eight jobs in the region in the fiscal year 2017-18, according to the results of a new economic impact study released today.
The Northern Colorado Public Colleges and Universities (NoCoPCU) in the economic value study are Aims Community College, Colorado State University, Front Range Community College and the University of Northern Colorado. The study, conducted by Emsi, measured the overall economic impact of NoCoPCU, and also the return on investment for students and Colorado taxpayers.
“Public colleges and universities offer an incredible return on investment, not just for the students who receive a life-changing education, but for the communities that are home to the institutions. This report reinforces the critical role higher education plays as a key driver of our regional economy, and the ripple effect institutions have in making our communities desirable places to live, work and learn.”
– CSU President Joyce McConnell
The study uses a wide array of data based on several sources, including the FY 2017-18 academic and financial reports from NoCoPCU; industry and employment data from the Bureau of Labor Statistics and Census Bureau; outputs of Emsi’s Multi-Regional Social Accounting Matrix model; and a variety of published materials relating education to social behavior.
Highlights of the economic impacts of NoCoPCU for Larimer and Weld Counties include:
- The net impact of institutions’ day-to-day operations (payroll, expenses and employee spending) during the analysis year was approximately $1.1 billion in added income to the Larimer and Weld economy.
- NoCoPCU’s research spending generated $299 million for the region.
- The net impact of NoCoPCU’s construction spending in FY2017-18 was $126 million.
- Start-up and spin-off companies generated $227.9 million.
- Spending by students, those who relocated or stayed in the region and who wouldn’t be in the region if not for the institutions, added approximately $147.9 million.
- Contributions from alumni currently employed in the regional workforce amounted to $2 billion.
- This combined total equates to a $3.9 billion impact, or 50,594 jobs supported for Larimer and Weld Counties’ economy during FY17-18.
The overall economic value is significantly higher than was measured in a similar study conducted two years earlier, and the count of supported jobs increased markedly, due to updates and improvements in methodology, background data, and institutional data. As a result, the present study offers a more relevant, comprehensive picture of the institutions’ value.
The study also included an investment analysis which looked at the total amount NoCoPCU received in FY 2017-18 through tuition and fees, government student aid, and other all other revenue, as provided by students, taxpayers and society. That investment resulted in an average rate of return of 12.3% for the investment students make, and 14.1% for the investment by taxpayers.
NoCoPCU’s FY 2017-18 students paid a present value of $641.5 million to cover the cost of tuition, fees, supplies, and interest on student loans. They also forwent $495.8 million in money they would have earned had they been working instead of attending college.
In return for their investment, students will receive $3.6 billion in increased earnings over their working lives. This translates to a return of $3.20 in higher future earnings for every dollar students invested in their education. Students’ average annual rate of return is 12.3%. The study notes this return outpaces the average 9.9% return investors see in the U.S. stock market.
Taxpayers provided NoCoPCU with $307.2 million of funding in FY 2017-18. In return, they will benefit from added tax revenue, stemming from students’ higher lifetime earnings and increased business output, amounting to $1 billion. A reduced demand for government-funded services in Colorado will add another $236.1 million in benefits to taxpayers.
For every dollar of public money invested in NoCoPCU, taxpayers will receive $4 in return, over the course of students’ working lives. The average annual rate of return for taxpayers is 14.1%.
In FY 2017-18, Colorado invested $2.5 billion to support NoCoPCU. In turn, the Colorado economy will grow by $12.4 billion, over the course of students’ working lives. Society will also benefit from $649.5 million of public and private sector savings.
For every dollar invested in NoCoPCU in FY 2017-18, people in Colorado will receive $5.20 in return, for as long as NoCoPCU’s FY 2017-18 students remain active in the state workforce.
The full NoCoPCU economic impact report is available online here.