Economic Impact

Each year we welcome more than 19,000 students who enroll at an Alabama independent institution to pursue a wide range of associate, bachelors, and graduate degree programs. Over 90% of these students receive some form of financial aid.

*Expenses for operation and maintenance of plant are excluded but are allocated to each of the other functions

NON-MEASURABLE ECONOMIC BENEFITS TO ALABAMA�S ECONOMY

1. The presence of a college or university in a community may be a �draw� to other types of businesses, which do not supply goods and services directly or indirectly to the educational institution. These businesses use student interns and employees with specialized skills such as science, computer programming, business or health care. Often these businesses employ student full-time upon graduation.

2. Faculty, staff and students often start businesses outside the institution. These entrepreneurial startups may often generate significant employment and payrolls as well as making significant contributions to the local economy.

3. Each institution provides a wide variety of athletic, cultural and social activities during the year. These programs undoubtedly enhance the quality of life in the local economies as well as attracting visitors during the course of the year. Additional visitors come to visit faculty, staff and students. This visitor spending supports hotels, motels, bread and breakfasts, restaurants, theaters, camp grounds, taverns, gift shops, and other local businesses. The study does not include the economic impacts of these visitors.

4. Faculty, staff and students deposit funds in local financial institutions, which are subsequently re-invested into the local community through business and consumer loans and mortgages. These funds bolster the regional and state economies.

5. Alumni of higher education institutions return to their institutions for alumni reunions and to take advantage of educational programs, such as Elderhostel. In some cases after a return visit they decide to relocate to the area. Faculty and staff retirees from the various institutions often continue residing in these communities. This study doesn�t consider the economic contributions associated with alumni relocating to these communities nor the impacts of retirees from the communities.

6. Faculty, staff and students serve as volunteers in community-based and faith-based organizations. In many instances they play a major leadership role within these institutions. Students also engage in service-learning experiences including tutoring in public schools, business plan development, recreational program leadership and staffing, among others. The economic value of the hours spent in these endeavors is not included in this study.

7. The estimated taxes associated with the total economic impact excludes workers and unemployment compensation payments from the institutions as well as real and personal property taxes paid to localities by businesses and employees. Consequently, the total estimated taxes paid are an underestimate of the actual taxes remitted at the state and local levels.

8. Most of the institutions have health care benefits and insurance for faculty, staff, and, in some cases students. These insurance plans help bolster the local health care community by providing financial support for services received as well as reducing the amount of uncompensated care provided by the health care institutions.

9. The most important long-term economic benefit not reflected in this report, however, is the increased human capital provided by private colleges and universities. The College Board�s recently released publication, Education Pays 2004, documents the benefits associated with college education. Graduates of these institutions enter the job market, receiving earnings well above those of high school graduates. Nationally, individuals holding bachelor�s degrees will earn 1.73 times the lifetime earnings of high school graduates. Even higher returns accrue to those with a masters, doctorate and professional degrees. These higher earnings are reflected in higher taxes paid to state and local governmental units. Furthermore, unemployment and poverty rates are lower for college graduates compared to graduates with a high school degree or less. College graduates make fewer claims on public social services, report better health and have lower incarceration rates than those with less education.