Interesting study by the Center for Law and Social Policy and the Center for Higher Education Management Systems warning that Georgia will leave $1.913 billion on the table in revenues if we don’t produce more college grads by 2025.
New analysis of US Census, National Center for Education Statistics, and Department of Education data by CLASP, the Center for Law and Social Policy, and the Center for Higher Education Management Systems shows to remain globally competitive, the United States will need to produce 24 million additional degrees by 2025 to achieve a 60 percent degree attainment rate among adults ages 25 to 64.
In Georgia, the current rate is 36.1 percent. At current attainment rates, the U.S. is on track to produce just 278,500 additional degrees and Georgia is on track to produce just 79,000 additional degrees by 2025– a significant shortfall.
This low credential production – relative to need – results in relatively small increases in average personal earnings and state revenues. Under the state’s current postsecondary patterns, annual personal per capita income in Georgia is projected to increase by about $240 in 2025, and additional state revenues in income taxes, property taxes, sales taxes and savings in Medicaid and corrections spending will increase by only about $287 million in 2025.
However, if Georgia improves college participation rates and credential attainment rates enough to meet the 60 percent credential attainment goal by 2025 (920,293 degrees), the state will see revenues increase by about $2.2 billion and exceed postsecondary costs by about $870 million in 2025. Georgia ranks 10th out of the 50 states on the size of the degree gap to fill to meet the 60 percent goal. By meeting the 60 percent credential attainment goal, annual per capita income in Georgia would also increase by approximately $1,800 in 2025.
The nation overall is also falling behind other leading countries in the number of adults with a postsecondary credential and the skills needed by employers. If the United States does not significantly increase the number of credentialed adults, the country stands to walk away from about $600 billion in additional national revenue in 2025. Currently, the United States ranks 15th among 34 Organisation for Economic Cooperation and Development (OECD) member countries with only 41 percent of the young adults having college degrees, behind leading OECD countries like Canada, Japan, France and the UK. The top three OECD countries – South Korea, Canada, and Japan – are on track to increase their college degree attainment to 60 percent by 2020.
“Leading OECD countries understand the direct correlation between educational attainment and national economic success. As policymakers and business leaders in the United States continue to look at ways to ensure our national economic prosperity, they need to push for investments to dramatically increase the number of postsecondary credentials,” said Vickie Choitz, Senior Policy Analyst, CLASP. “These increases can’t be put off for another five or 10 years if we want a strong economic future for America.”
The Return on Investment Dashboard allows stakeholders to calculate the short- and long-term effects of either maintaining the status quo or increasing investments in postsecondary education. For example, under the status quo, additional national revenues from the 278,500 additional credentials will be about $6 billion. On the other hand, additional national revenue from meeting the 24 million credential mark would top $600 billion in 2025.
“For some states, the 60 percent goal is out of reach; however, all states would see substantial revenue gains if they invest in increasing the number of adults who attain postsecondary credentials,” said Patrick Kelly, Senior Associate, NCHEMS. “This is a win-win for states, their local businesses, and their local economies.”
Federal and state funding for higher education, adult education and workforce development has declined over the past few decades and remains under threat with budget pressures. This tool shows that moves to cut state funding for postsecondary education and federal Pell Grants are short-sighted. By investing more in postsecondary education, not only will the country’s coffers reap rewards, but so too will personal income grow. Better educated workers earn higher wages and are more likely to be employed than less-educated ones.
Under current postsecondary investment patterns, however, annual personal per capita income in the U.S. is projected to increase by just $14 in 2025. By meeting the 60 percent credential attainment goal, annual per capita income in the U.S. would increase significantly more to approximately $1,400
–From Maureen Downey, for the AJC Get Schooled blog.