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An Investment Worth Making

Community colleges became a subject of national discussion in recent weeks with President Barack Obama’s announcement of the America’s College Promise program. The plan would make the first two years of community college free for students meeting academic and completion requirements. It’s a bold call to action that says a high school diploma is not enough formal education. Instead, two years of college would be the new minimum. The concept is reminiscent of California’s Master Plan for Higher Education. Enacted 55 years ago, it delineated specific roles for the state’s three higher education systems. Community colleges offered the first two years of general education and major classes, along with workforce training. California State University provided bachelor’s and master’s degrees, while University of California offered doctoral and professional degrees and engaged in research. Community colleges were open to high school graduates or adults aged 18 and older. And they were free. Offering unprecedented access to higher education, the California Community Colleges became the largest system of higher education in the world that today serves 2.1 million students. California’s community colleges remained free for students until the state established a nominal tuition rate in 1984. More than 30 years later, California continues to make community colleges as accessible as possible. Our students pay the lowest enrollment fees in the nation – just $46 per unit. That’s still unaffordable for many, so the state established a fee waiver for the neediest students. In 2012-13, 1.1 million students took advantage of the waiver, more than half the total number of students enrolled. A criticism of the America’s College Promise program is its price tag – $60 billion over 10 years. That has led many to dismiss the idea, saying it is dead on arrival in Congress. Political realities certainly dictate the viability of such a sweeping proposal. But other realities need to be considered. First, the documented need for an educated workforce. Data clearly show educational achievement is not keeping pace with workforce needs. And without a qualified workforce, our economy will not continue the sustained growth over time we have come to expect. How big is the shortage? In California, it could be as high as 2.5 million workers in 10 years. Projections by the Public Policy Institute of California show industry will need an additional 1 million bachelor’s degree holders, plus another 1.5 million workers with “some college.” For analytical purposes, the Policy Institute includes students who earn associate degrees, complete a technical certificate, or attend college without receiving a degree or credential in the “some college” category. The Employment Development Department projects California will add 2.6 million jobs in the next five years, a 16 percent increase. Most will be in four industries – health care and social assistance; hospitality and food services; professions, sciences, and technical services; and retail. More than two-thirds will be in high-growth fields, and of those, about 60 percent will require “some college” or a bachelor’s degree. Even the slower growing sectors face a projected shortfall of qualified workers as high as 75 percent. Investing in community colleges also yields other significant returns beyond a qualified workforce. At College of the Canyons, we commissioned an analysis of our economic impact and return on the investment of education to the wider community. The study quantified the effect of higher incomes that result from students acquiring new skills. It also studied the societal benefits associated with higher education levels, namely improved health, and lower crime and unemployment. In fiscal year 2012-13, state and local taxpayers invested $70.7 million in College of the Canyons. By comparison, the students we served that year will earn $1.7 billion during their careers, and social savings will equal $57 million. The extra earnings and social savings far outweigh the initial investment of taxpayer resources. Higher earnings in turn lead to increased tax revenue. With more education and training, students will acquire higher-paying jobs. Increased salaries lead to more consumer spending, which generates sales tax revenue. Students will also pay additional income tax on their higher salaries. The study projects state and local government will realize $102.3 million in additional tax revenue throughout the students’ careers. The debate over America’s College Promise is just beginning. The ensuing discussion will focus on the price tag, and where else that money might be directed. Instead, serious consideration should be given to the return on that investment. Education spending enhances the potential of our greatest resource – people – and yields tangible dividends to business, industry and our economy. Dianne G. Van Hook is chancellor of College of the Canyons in Santa Clarita, recently recognized as the second-fastest growing community college of its size in the nation.

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