A new economic impact study says South Plains College produces significant returns for the area’s economy, students, businesses and taxpayers.
The study reached three major conclusions. South Plains College and its students stimulate the local economy by $399.2 million in added annual income, roughly 2.6 percent of the region’s total gross regional product (GDP).
Students who leave SPC with an associate degree increase their lifetime earning potential by $378,400 more than a student with just a high school diploma or GED.
SPC also provides a benefits-to-cost ratio of 5.2. That is to say that every dollar of state or local tax money invested in SPC will have a cumulative present value of $5.20 over the next 30 years.
These conclusions were reached from a socioeconomic impact study, titled “The Economic Value of South Plains College” and conducted by Economic Modeling Specialist, Inc. (Emsi). The analysis examined the economic value of the college’s operations in Hockley and Lubbock counties and quantified the economic impact and return on investment of education.
“This study gives us a better understanding and appreciation of the value of a college degree and how students, businesses and the taxpayer benefit from the operations of South Plains College,” said Dr. Robin Satterwhite, SPC president. “South Plains College plays a significant role in the local economy and this study substantiates that role.”
Dr. Satterwhite said Emsi was commissioned to conduct the study as the college entered its 60th year of operation. “We wanted to learn how much SPC contributes to the area’s economy after 60 years of providing higher education opportunities,” he said. “The results indicate that SPC creates a significant impact on the business community and generates a return on investment to its major stakeholders. SPC remains an economic engine for workforce development and the public benefits greatly from SPC’s existence.”
Emsi’s economists collected information for fiscal year 2015-16 from the college to support the study. Other findings in the study include:
• During the study year, South Plains College enrolled 12,765 students in credit programs and an additional 2,387 in non-credit workforce development programs.
• The education and training SPC provides that are embodied in the regional workforce where past and present students are employed generate $312.4 million in added income for the region annually. This added income is equivalent to supporting 5,402 jobs.
• As an important employer in the South Plains, the college’s payroll and day-to-day operations add $49.7 million in income to the region, equivalent to supporting 922 jobs.
• The spending impact of students who live outside the region and relocate to attend SPC is estimated to be $36.7 million in added income annually, the equivalent of supporting 604 jobs.
• For every $1 a student invests in an SPC education, he or she will receive a cumulative of $5.20 in higher future earnings over the next 30 years.
• SPC student enjoy an attractive 17.7% annual rate of return on their educational investment at the college and recover all costs, including foregone wages while attending SPC, in 8.2 years.
• Every dollar invested in the college by state and local taxpayers produces a real money annual return of 13% in the form of higher tax revenues and avoided social costs attributable to education.
• Over the course of the working years of the student population that was studied, society as a whole in Texas will receive a present value of $2.5 billion in higher earnings and social savings.
• For every $1 that society spent on the SPC 2015-16 educations, society will receive a cumulative value of $18.40 in benefits over the working careers of the student cohort.
Emsi, a CareerBuilder company, is a leading provider of economic impact studies and labor market data to educational institutions, workforce planners and regional developers in the U.S. and internationally. Over the past 16 years, Emsi has completed more than 1,700 economic impact studies for educational institutions in four countries.
“We use a conservative methodology and apply the most robust economic impact modeling methodologies to find the value of community colleges to the regions they serve,” said Anna Brown, Emsi director of consulting. “While many people concede higher levels of education are valuable, our analysis takes a full accounting of the costs and benefits to accurately demonstrate the returns to the business community, students, taxpayers, and the broader society.”
“Investing in South Plains College and in Texas’ community college system is sound policy, based on a number of perspectives” said Dr. Satterwhite. “We enrich the lives of our students and help reduce the demand for taxpayer-supported services. South Plains College contributes significantly to the vitality of the local workforce and the economy, as well as to the education of its citizens.”
For the detailed report on this study visit: www.southplainscollege.edu/ecoimpact