Community colleges provide returns for students, but state subsidies lag

Earning an associates degree from a community college is not only significantly cheaper than earning a bachelor’s degree from a four-year college, but the two-year degree provides almost the same return on investment, University of Connecticut economist say.

“It is very clear that for a very limited investment, community colleges return pretty high results,” said Steven P. Lanza, editor of UConn’s latest quarterly economic review. “Surprisingly, the returns from a community college education aren’t far off the mark of a four-year degree.”

Earning a degree from a community college increase lifetime earnings by 8.3 percent, according to Lanza’s report in The Connecticut Economy. A four-year degree from the University of Connecticut increases earnings by 9.4 percent. Both estimate takes into account the cost of tuition and the loss of potential income while in school.

Sen. Gary D. LeBeau, D-East Hartford and co-chairman of the legislature’s Commerce Committee, says the report validates that funding for community colleges needs to be a priority.

“It would seem like a slam dunk for Connecticut policymakers,” he said.

But the report warns that as the state’s economy soured in recent years, leading to skyrocketing enrollment at community colleges, state subsidies have not been sufficient.

“Students and their parents are shouldering a growing share of the burden,” the report says. “Hard economic times may… put pressure on governments to reduce public support for education and raise public-school tuitions. Predictably, that is happening in Connecticut.”

In 2009, the state’s 55,000 community college students paid for 21 percent of the total cost of their education, the highest rates in the last 20 years.

“We have to keep the price affordable or it could begin to impact students’ ability to attend our schools,” said Mary Anne Cox, assistant chancellor of Connecticut Community Colleges.

Community colleges have been level-funded by the state at $158 million since the 2008-09 school year. In that time, enrollment has exploded and now accounts for almost half of all public college students. UConn, which has about one quarter of the state’s public college students, will receive $332 million from the state this year.

Higher Education Commissioner Michael Meotti said this report should not be used to lessen the importance of the state’s five four-year institutions.

“Connecticut’s economy tilts towards needing more people with four-year degrees,” he said. “We know that community colleges are important, but we need to work towards making them more successful.”

Meotti points to the 25 percent graduation rate of those that attend the state’s community colleges. This means the state is subsidizing school for someone that will likely drop out.

A recent report estimated that the cost of educating students at the state’s five public four-year universities who did not make it to their second year totaled about $21 million for the 2007-08 school year. That tally did not include the costs for states to subsidize community colleges, but Meotti estimates it is an expensive price tag for the state.

Even with the high dropout rate at community colleges, Lanza says their time in school still positively impacts their income. The report estimates a person with some college credit receives 21 percent more on average than someone with only a high school diploma or GED.

“The state stands to benefit for those they invest, even if they drop out,” he said. “I wouldn’t let dropout rates be a reason for the state to stop investing in community colleges. That would not be a smart move.”

Cox agrees, saying any level of higher education is associated with improved health habits, lower rates of welfare dependence and higher rates of tax revenues.

Lanza also said that those with a community college degree are more likely to stay in the state after they graduate than those with four-year degrees.

“Public subsidies to community colleges stand a good chance of being recouped when they stay here,” he said.