Report says college aid pays off

America has an interest in helping more students get college degrees because a better educated population will pay more in taxes and be more civically involved, less likely to be unemployed and less reliant on government assistance, according to a new study to be released this week.

“The failure to invest in college access for all students not only results in diminished personal economic opportunities for low-income students but also weakens the fabric of society and risks costing the nation more in the long-term,” the study says.

The report, “Investing in America’s Future: Why Student Aid Pays Off for Society and Individuals,” was conducted by the Washington, D.C.-based Institute for Higher Education Policy and is being officially released jointly with Scholarship America, a private scholarship group, at the National Press Club in Washington on Friday.

The study focuses on how increasing opportunities for people to go to college benefits society as a whole, rather than just the individuals enrolled.

“While many policymakers and education leaders cite the fact that a bachelor’s degree has become worth more than $1 million in lifetime earnings, the other economic and social benefits of college are even more important, though often unrecognized,” according to the report.

While individuals who earn college degrees benefit from higher salaries and increased life expectancy, a well-educated workforce is also a boon to society at-large, the study says. Higher earnings boost states’ tax revenues, and college graduates are less likely than others to rely on government welfare programs. The report also argues that investment in higher education reduces crime rates and increases graduates’ involvement in their communities, among other social benefits.

But School of Education Dean Douglas Sears said increasing aid to allow more students to earn degrees might not have all the benefits the report claims.

“Money misses the point,” he said, saying the report feeds “the myth that education is underfunded.”

“I think in our society we spend an awful lot on education at all levels,” he said.

Sears said educators should be more concerned with preparing high school students to study at the college level and making sure qualified applicants have the opportunity to attend college than with increasing financial aid.

“If you look at how much we actually spend on education in the United States, the number is staggering,” he said.

COMMUNITY COLLEGES

A report by Massachusetts Community Colleges released in early April said funding community colleges is a smart investment for the commonwealth because a two-year degree can double a graduate’s annual salary from $21,200 to $42,600.

Because nine out of 10 Massachusetts community college students get jobs in the commonwealth, their extra earnings increase the tax base, according to the report.

“The state’s support of community colleges is a smart investment that in economic terms alone pays a good return,” the study said.

Researchers estimated that community college students enrolled in 2001-02 alone will add $25.2 million more to the state’s coffers over their lifetime than if the same workers did not earn degrees. Using the same calculation, researchers said the added revenue for all community college graduates working in Massachusetts totaled $513 million each year.

Sears questioned whether sending more students to community colleges would actually boost revenues as much as the study claimed. The growing number of graduates might dilute the value of their degrees, making the study’s salary estimates inaccurate, he said.

“If you keep building up that supply … that presumes an expanding demand,” he said. “We need to send as many people to college as we do, frankly.”

Recent Bureau of Labor Statistics reports may bear out Sears’ argument.

In March, the bureau’s Current Population Survey indicated that almost 10 percent of people who wanted work could not find the employment they wanted.

The measurement represents unemployed workers, people who were working part-time but wanted more hours and “marginally attached workers,” defined as “persons who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the recent past.”

In March, 9.9 percent of the civilian labor force plus marginally attached workers (who are not counted in the labor force because they are not actively seeking work) fit into one of these categories – a figure that puts the 5.7 percent unemployment rate in broader context. (Both figures are seasonally adjusted.)

But Joseph Cronin, Dean of Leslie University’s School of Education and an adjunct professor at Boston University, said having a better-educated workforce helps reduce unemployment because workers with college degrees are more versatile and can take a variety of jobs.

He said the Massachusetts economy in particular has expanded to employ a large proportion of highly educated workers.

“Massachusetts has a higher percentage than, let’s say, Alabama or Mississippi,” Cronin said. “Obviously it creates a lot of pressure” to create jobs for qualified people.

The Massachusetts Community Colleges report said the colleges are “an essential part of the workforce development environment in Massachusetts, providing over 5,000 workforce development courses each year for Massachusetts business and industry.”

Increasing community college enrollment also has benefits that are difficult to measure, including “improved health, improved social stability and a stronger, better educated workforce,” according to the report. Educated workers are more likely to have health insurance through their employers, rather than through state programs, the study said.

The study also said helping students afford community colleges is important because of the population the institutions serve. More than half of community college students in the state are older than 25, and more than a quarter are minority students. “Most community college students are the first in their family to pursue higher education,” the report stated.

Cronin agreed, saying that enabling more people to earn degrees has economic, political and social benefits to society.

LOANS VS. GRANTS

The national study to be released Friday concludes that colleges, the government and the private sector have to work together to increase need-based aid, particularly in the form of grants. Over the past 20 years, the trend in financial aid has shifted from grants to loans – which can discourage low-income students from enrolling in college.

“Experts estimate that in the first decade of the 21st century as many as 2 million college-qualified high school graduates from low- and moderate-income families will not attend college because of financial barriers,” the institute’s report says.

Researchers also question how the shift to loans instead of grants will affect students’ contributions to society after they graduate.

“Excessive student loan debt threatens to disrupt the delicate balance between private and public benefits” of higher education, the report says. “If policymakers and education leaders continue to emphasize the personal economic returns of higher education, how can society reasonably expect recent college graduates to forego economic prosperity to fill shortages in critical but low-wage careers, such as teaching and social work?”

“The future state of college access rests primarily on a recommitment to need-based grant aid,” the group concludes.

Both studies emphasize that having more students attend college has broader benefits than just personal gain for graduates. Education leaders may disagree on how much financial aid is needed and how to distribute it and whether the labor market can support an increasingly educated workforce, but new evidence on the economic and social effects of growing college enrollment is shaping the debate over education policy in America today.