Presenting the Socioeconomic Benefits of

Coast Community College District

Orange Coast College Costa Mesa, CA

About the District

Governed by locally elected Board of Trustees

Three colleges Orange Coast College (Costa Mesa)

Golden West College (Huntington Beach)

Coastline Community College (District-wide) 60,000 students

300 degree and certificate programs offered

Economic Region

Economic Region

About the Study

• District, along with other OC CC’s, commissioned a study of the socioeconomic benefits of our colleges on our local region

• The Economic Contribution of the Orange County Community College Districts by CCbenefits, Inc. (affiliated with AACC)

• Economic impact model subjected to peer review and field-tested on over 500 different community colleges in US & Canada

Beginning with the Regional Analysis

District Operations Spending

District Operations: CCCD creates regional income through the earnings of its faculty and staff, as well as through its own operating and capital

expenditures.

Total Effect: After adjusting for tax payment effects, we can say

that CCCD operations annually contribute $74.9 million to regional

income in the local region.

Past-Student Productivity Effects

Direct Effect: Past students contribute an estimated $2.4 billion

worth of added income per year to the regional economy after leaving

CCCD.

Indirect Effect: The estimated multiplier effect of past student

productivity in other industries increases income by yet another $386.1 million.

Total Income in District Service Area

The defined economic region generated a total of $112.2 billion

in labor and non-labor income in FY 2004.

Of this, CCCD operations spending and past student productivity effects

accounted for $2.9 billion, or 2.6% of all regional income.

Investment Analysis

Continuing with the

Investment Analysis Component

The return to taxpayers for their support

• Broad taxpayer perspective • Narrow taxpayer perspective

The student benefits due to higher earnings

What we measured:

A broad collection of external social benefits

• Medical savings• Crime savings• Welfare and unemployment savings

This figure shows the present value of increased future earnings as a direct result of the students’ education.

This figure shows the present value of increased future earnings as a direct result of the students’ education.Student costs consist of the tuition paid by the students and, most

importantly, the opportunity cost of time (earnings foregone).

Student costs consist of the tuition paid by the students and, most importantly, the opportunity cost of time (earnings foregone).

Student Benefits

Higher earnings = $2.4 billion

Student costs = $492.1 million

Benefit/Cost Ratio: The ratio of benefits over costs. A 1.5 ratio, for example, means that every dollar invested will return a cumulative

$1.50 to the investor over the time period analyzed.

Criterion for feasibility: The B/C ratio must be greater

than or equal to 1.

Benefit/Cost Ratio: 5.0

Student Benefits

Higher earnings = $2.4 billion

Student costs = $492.1 million

Rate of Return: the average earning power of the money

used over the life of the investment. A 15% rate of return, for example, means that the revenues collected

over time will equal the costs, plus generate a 15% return.

Criterion for feasibility: the rate of return must exceed the returns from alternative uses

of the same money.

Rate of Return: 17.1%

Benefit/Cost Ratio: 5.0

Student Benefits

Higher earnings = $2.4 billion

Student costs = $492.1 million

Payback Period: This is the length of time needed from

the beginning of the investment before the

cumulative future revenues return all of the investments

made.

Payback Period: 8.3 yrs

Rate of Return: 17.1%

Benefit/Cost Ratio: 5.0

Student Benefits

Higher earnings = $2.4 billion

Student costs = $492.1 million

Student Benefits

Some Key Findings Achieving an Associate Degree from CCCD will increase earnings to $40,438

per year, or 35.3% more than the average high school graduate.

An Associate Degree graduate will earn $378,500 more than someone with a

high school diploma or GED over his or her future career.

Lifetime earnings will increase $4.95 for every dollar invested (tuition, fees, books, and foregone earnings).

Social Benefits

The medical, crime and welfare/unemployment savings are avoided costs, i.e., the reduced burdens on employers and

taxpayers. These external social benefits are generated annually as the education level of the workforce increases.

The medical, crime and welfare/unemployment savings are avoided costs, i.e., the reduced burdens on employers and

taxpayers. These external social benefits are generated annually as the education level of the workforce increases.

$7.3 million

$7.0 million

$3.2 million

$17.6 million

Aggregate

.

Medical Savings

Crime Savings

Total

Welfare/Unemployment Savings

The broad perspective: State taxpayers invest, but

beneficiaries are widely dispersed (students, business

community, society). We count all of the benefits

regardless of to whom they accrue.

Return to Taxpayers

Taxpayers Costs = State Appropriations + Property Taxes

Taxpayer Benefits = Higher Earnings + Social Benefits

Broad Taxpayer Perspective

Benefit/Cost Ratio: 17.3

Return to Taxpayers

Taxpayers Costs = State Appropriations + Property Taxes

Taxpayer Benefits = More Taxes Collected + Social Benefits

Narrow Taxpayer Perspective

Payback Period:

Rate of Return:

Benefit/Cost Ratio: 3.9

15.2%

9.0 yrs

What does all this mean?

To Summarize…

IT PAY$ BACK:

IT PAY$ TO LEARN:

IT PAY$ TO INVEST:

The CCCD regional economy is measurably stronger

Taxpayers in the State of California are measurably better off

The CCCD students are measurably better off

To Summarize…

ECONOMY

STUDENTS

TAXPAYERSFor every dollar invested in our colleges, the public will receive $17 back over the next 36 years

For every unit earned, the state and local community saves $20/year

For every unit earned, the state and local community saves $20/year