Vance-Granville Community College students see a healthy return on their investment in education, and the region benefits from the education provided by the college to the tune of $271.3 million per year. Those are among the key findings of a new report by Idaho-based Economic Modeling Specialists Intl. (EMSI) on VGCC’s contributions to individual students, taxpayers and the regional economy. The report was presented to the VGCC Board of Trustees at its March 18 meeting. EMSI has conducted 900 such economic impact studies for colleges and universities throughout the U.S. and internationally.
VGCC’s status as an economic engine for its four-county service area (Vance, Granville, Franklin and Warren counties) was confirmed by a finding that the local economy receives approximately $22.3 million in net added income each year due to VGCC payroll and operations spending. Also, because education and training make workers more valuable and businesses more productive, the accumulated credits achieved by former VGCC students over the past 30 years translated to an estimated $271.3 million in added regional income in 2011-2012. VGCC accounts for 6.4% of the overall “gross regional product,” which measures the value of all goods and services produced in the four-county area.
From the perspective of the student, EMSI’s analysis concluded that for every dollar students invest in their education at VGCC, they receive a cumulative $7.70 in higher future income over the course of their working careers. Compared to someone with a high school diploma, graduates with two-year degrees from the college earn $9,100 more per year, on average, over the course of a working lifetime. VGCC students enjoy a 24.5% rate of return on their investments of time and money. On average, students recoup all of what they initially spent on their education in 6.3 years.
Meanwhile, taxpayers see a rate of return of 9.3% on their investment in VGCC. By comparison, economists typically assume a 3% rate of return when dealing with government investments. A rate of return of 9.3% means that VGCC generates a surplus, primarily through its students and educational services to the region, that state and local governments can use to fund other programs. Higher student earnings and associated increases in property income generate about $2.5 million in added tax revenue each year. The state also saves an estimated $1.6 million per year from VGCC’s impact on improved health and reduced public assistance, unemployment, and crime. The report’s executive summary concludes, “The results of this study demonstrate that VGCC is a sound investment from multiple perspectives. The college enriches the lives of students and increases their lifetime incomes. It benefits taxpayers by generating increased tax revenues from an enlarged economy and reducing the demand for taxpayer-supported social services. Finally, it contributes to the vitality of both the local and state economies.”