[Originally posted by Building Indiana Business.]
Bigger Than You Thought
The benefits surrounding private academic institutions has historically been a bit of a difficult thing to quantify. But a new study published by Independent Colleges of Indiana provides a rather comprehensive profile of the sector’s widespread impact.
Independent Colleges of Indiana (ICI) is a nonprofit association that represents the state’s 30 private, nonprofit, accredited universities. They include the University of Notre Dame, Butler University, the Rose-Hulman Institute of Technology, and other high-profile schools.
The ICI’s economic impact study tallied the combined impact of all 30 of these institutions. It’s worth noting there are about 60 private colleges in Indiana, but the ones excluded from this study are either for-profit or not regionally accredited.
Research for ICI’s study was conducted by the Keck Graduate Institute, a California-based graduate school that is part of The Claremont Colleges network. Data was sourced from the U.S. Department of Education’s Integrated Postsecondary Education Data System (IPEDS) and supplemental institutional surveys.
Key findings included:
- Private, nonprofit colleges generate a $5.4 billion annual impact on Indiana’s economy.
- The sector is the 7th largest employer in the state with more than 22,000
- The ripple effect from private, nonprofit colleges results in an additional 27,565
- The campuses draw over 5 million visitors a year leading to some $530 million in purchases annually at Indiana restaurants, hotels, sports venues, art galleries, and other establishments.
- $979 million in taxes generated, including $215 million in income and sales tax to the state and $26 million in other state, county, and local taxes.
- More than 91,000 students are enrolled at private, nonprofit colleges in Indiana.
- Spending on capital projects reached $2.1 billion over the 5-year period of 2012-2017, supporting Indiana construction. These investments also helped generate an additional $2.2 billion in indirect and induced purchases and created 3,200 jobs.
- Alumni from private, nonprofit schools made $17.4 billion in direct purchases in Indiana in 2018. That spending helped create 165,000 jobs.
- The sector produces roughly 30 percent of Indiana bachelor’s degrees.
- Students at private nonprofit colleges receive only 6 percent of the state’s higher education expenditures.
Further Updates Forthcoming
The ICI has launched an online version of the economic impact study that will be continuously updated. The online version will be divided into three parts: an economic impact report generator, an economic impact calculator, and a technical report. Users will be able to refine data as needed, such as focusing research on an individual institution’s regional and statewide impact across multiple categories. There will also be a portal available to colleges that seek to update their data.
There’s A Lot More
On the surface, one might expect that things like the direct purchasing power and payroll spending of Indiana’s private colleges and universities to be among the sector’s biggest highlights. But, even though they’re important, they’re only the most recognizable layer of what is actually a much wider impact.
Going deeper, our economy starts to gain significantly more value and long-term benefits. Graduates, for example, are an economic positive in and of themselves. Statistically speaking, they earn more, have more spending potential, are more active in their communities, live healthier lives, and produce children that continue this upward mobility by also earning a degree (NAICU).
As noted by the ICI and the Department of Education, “A college degree not only adds to an individual’s lifetime purchasing power, but because the children of college graduates are more likely to go to college themselves, it also creates inter-generational equity. 90% of children from the lowest income quintile who attend a private college move to a higher income quintile after graduation.”
Private schools are also a major draw for out of town dollars and talent. They contribute to “brain-gain” by drawing highly educated people to work and study, and numerous additional visitors that generate tourism revenue. Additionally, the civic and philanthropic activities surrounding private colleges, their faculty, and their alumni contribute significantly to the state’s economic wellbeing.
Building Indiana Business: editor@buildingindiana.com | 219-226-0300