Cowley College recently contracted with EMSI to conduct a study of its stakeholders. The study measured the level of impact a college education has on Cowley’s students as well as the financial contribution the college adds to the community at large.
Stephen Pool with EMSI recently provided an overview of the study with the Cowley Board of Trustees.
Pool said Cowley College creates a significant positive impact on the business community and generates a return on investment to its major stakeholder groups, students, taxpayers and society. Using a two-pronged approach that involved an economic impact analysis and investment analysis, the study calculated the benefits received by each of these groups.
During fiscal year 2016-17 alone, Cowley added $265.5 million in income to the Cowley College Service Area economy. Expressed in terms of jobs, Cowley’s impact supported 3,735 regional jobs. For perspective, the activities of Cowley and its students support one out of every 98 jobs in the CCSA.
The operations spending impact showed the net impact of the college’s operations spending added $17.9 million in income to the regional economy.
The student spending impact showed around 25 percent of credit students attending Cowley originated from outside the region. Some of these students relocated to the CCSA. In addition, some in-region students would have left the CCSA for other educational opportunities if not for Cowley. These relocated and retained students spent money on groceries, mortgage and rent payments, and so on at regional businesses.
The expenditures of relocated and retained students in fiscal year 2016-17 added $3.5 million in income to the CCSA economy.
“We can attribute this new or retained money to Cowley College,” Pool said.
Pool also discussed the alumni impact. The net impact of Cowley’s former students currently employed in the regional workforce amounted to $244.2 million in added income.
The investment analysis showed Cowley students paid a present value of $8.3 million to cover the cost of tuition, fees, supplies and interest on student loans. They also forwent $17.9 million in money that they would have earned had they been working instead of attending college.
In return for their investment, students will receive $117.7 million in increased earnings in their working lives or 4 1/2 times their investment (i.e. 449 percent).
“This is fantastic,” Pool said. “On average, a 30-year investment in the stock market averages around 10 to a 10.1 percent rate of return. So it is safe to say that an investment in an education at Cowley College is a safer and better investment than comparable money spent in the stock market.”
Taxpayers — federal, state, and local — provided Cowley with $13.5 million of funding in fiscal year 2016-17. In return, they will benefit from added tax revenue, stemming from students’ higher lifetime earnings and increased business output, amounting to $45.8 million. A reduced demand for government-funded services in Kansas will add another $2.1 million in benefits to taxpayers.
For every dollar of public money invested in Cowley, taxpayers will receive $3.60 in return, in the course of students’ working lives. The average annual rate of return for taxpayers is 8.7 percent.
“This is very good,” Pool said. “Very few taxpayer investments have good returns.”
Finally, in fiscal year 2016-17, society as a whole contributed $51.1 million to fully support Cowley. For that investment, the Kansas economy will grow by $555.4 million during the course of students’ working lives.
“When the smoke clears, educating our students with appropriate skills, work ethics, and attitudes is an investment which benefits all of society, Cowley president Dr. Dennis C. Rittle said. “Education is a multiplier on an exponential level as this study reveals. The tremendous return-on-investment, which education offers, is a primary reason those of us who serve in education are willing to expend ourselves to serve the greater good for our communities and the places we call home.”