The Fiscal Impacts of College Attainment

Abstract

This study quantifies one part of the return to U.S. public investment in college education, namely, the fiscal benefits associated with greater college attainment. College graduates pay much more taxes than those not going to college. Government expenditures are also much less for college graduates than for those without a college education. Indeed, over an average lifetime, total government spending per college degree is negative. That is, direct savings in post-college government expenditures (conservatively, about $85,000 per four-year-equivalent degree over an average lifetime) are greater than government expenditures on higher education (generously, about $74,500 per degree). Plus, the direct extra tax revenues from college graduates alone (roughly $471,000 per degree over a lifetime) are more than six times the gross government cost per college degree. The average real fiscal internal rate of return on government investment in college students is conservatively estimated to be 10.3%.