New report: Who Wins? Who Pays?
As states grapple with rapidly rising college costs and federal demands to boost college graduation rates, a new study, Who Wins? Who Pays? The Economic Returns and Costs of a Bachelor’s Degree, by the American Institutes for Research (AIR) and the Nexus Research and Policy Center (Nexus), estimates that taxpayers subsidize bachelor's degrees in public colleges and universities an average of more than $60,000 per degree. The study, co-authored by Jorge Klor de Alva and Mark Schneider, found that taxpayer subsidies increase as schools become more selective.
With regard to the impact on taxpayers, the research found:
- Taxpayers benefit from the higher income taxes paid on the higher salaries earned by college graduates, ranging from $50,000 in additional taxes paid over the work life of a graduate from a less selective not-for-profit institution to almost $150,000 in additional income taxes paid over the work life of a graduate from the most selective not-for-profits;
- Taxpayer subsidies increase dramatically among the most selective institutions, to almost $60,000 in not-for-profit institutions to nearly $110,000 in the most selective public institutions;
- Among open admission and less selective schools, taxpayers – on average – paid almost $8,000 per student per bachelor’s degree at not-for-profit institutions, far less than the more than $60,000 in taxpayer dollars supporting a student at a public school; and
- Because for-profit institutions do not receive state subsidies and pay taxes rather than receive tax exemptions, taxpayers benefit by around $6,000 per bachelor’s degree.