Benefit-Cost Analysis of Accelerated Study in Associate Programs of the City University of New York

• In Event: Roundtable Session 8
  In Roundtable Session: Increasing Community College Completion Rates Through Policy Change, Structured Resources, and Alternate Spending

Abstract

1) Objectives and Purpose:
This external study evaluates CUNY’s Accelerated Study in Associate Programs (ASAP) from a benefit-cost perspective. Although ASAP requires more resources per student than the traditional associate program, the cost per graduate was found to be lower because of its much higher effectiveness in producing graduates. Looking further, this study analyzes the monetary costs and benefits of the ASAP program with emphasis on financial returns to taxpayers and students.

2) Perspectives and Theoretical Framework:
Benefit-cost analyses enable one to ascertain whether a particular alternative is “worth it” by comparing the costs in monetary terms with the value of the benefits in monetary terms. In the case of improving educational success, there are obvious benefits to the student as well as to the taxpayers who pay much of the cost of investment in education. By increasing the numbers and quality of educated persons in society, the society gains from higher economic productivity and income, as well as greater technological advance and inventive activity. It also experiences fiscal benefits in higher tax revenues and lower demand for and costs for spending on public health, criminal justice, and public assistance (Belfield & Levin, 2007).

3) Methods:
The benefits to taxpayers were compared with taxpayer cost per three-year associate degree under ASAP and the traditional program. The returns to taxpayers were comprised of the additional tax revenues from the higher income of associate graduates as well as the reduced cost of public services associated with the associate recipients relative to high school completers. The benefits of education were identified as greater employment and higher income and tax revenue, lower costs for public health, crime, and public assistance. Values for each benefit were estimated and compared for those with an associate degree versus high school completers.

4) Data Sources:
Data for this study come from various sources. Student level administrative data was provided by the ASAP program and CUNY Office of Institutional Research and Assessment. The following data sources were used to determine benefit value: American Community Survey 2005-2010, NBER-Taxsim, 2009, Medical Expenditures Panel Survey – 2008. CUNY Budget Office provided data on cost of attendance.

5) Results:
For each dollar of investment in ASAP by taxpayers, the return was between three and four dollars. For each dollar of investment by students, the return was 12 dollars, even when including foregone earnings by students as the major component of student costs. When converted into overall benefits generated by 1,000 enrollees, the considerably higher productivity of ASAP in producing associate degrees would provide fiscal benefits to the taxpayers of $46 million dollars beyond those of investing an approximately equal amount in the conventional degree program.

6) Significance:
This study provides support for the ASAP program and its potential impact for both community college students nationwide, as well as taxpayers who can reap the benefits from investing in a successful program with stellar outcomes, versus the traditional program.

Authors

• Henry M. Levin, Teachers College, Columbia University

• Emma Garcia, Economic Policy Institute