The Benefits to Taxpayers from Increases in Students - RAND ...

70 The Benefits to Taxpayers from Increases in Students’ Educational Attainment
Center for Education Statistics, 2007, Table 33, p. 46). Assuming that K–12 school
districts can generally accommodate some increases in enrollment without additional
construction, we estimate that the cost of additional education in secondary schools
will average about $7,700 per pupil ADA. If a student were to complete high school
rather than dropping out, taxpayers would have to pay roughly $15,000, in 2002 dollars
discounted to age 18, to pay for the additional schooling.
In the 2000–2001 school year, the most recent school year for which data were
available, public two-year colleges’ current expenditures averaged about $9,400 per
FTE pupil (U.S. Department of Education, National Center for Education Statistics,
2007, Table 346, p. 500). Two-year colleges’ tuition and fees that year averaged
about $1,800 per FTE (U.S. Department of Education, National Center for Education
Statistics, 2007, Table 320, p. 467). We assume that virtually all two-year colleges’
expenditures are for educational activities and that federal, state, and local government
appropriations provide the difference between two-year colleges’ average current
expenses and students’ tuition and fees. Accordingly, it would cost taxpayers about
$7,600 per FTE to provide additional education in a two-year college.
We assume that students who are induced to obtain some college rather than
terminating their education at high school graduation will generally attend lowercost
institutions that are relatively close to their homes. Accordingly, we assume that
increasing education from high school graduation to some college will cost taxpayers
about $15,000, in 2002 dollars, to pay for the increase in education.
In the 2000–2001 school year, public four-year colleges’ current expenditures
averaged about $28,000 per FTE pupil (U.S. Department of Education, National
Center for Education Statistics, 2007, Table 346, p. 500). Students’ tuition and fees
that year averaged about $7,800 per FTE (U.S. Department of Education, National
Center for Education Statistics, 2007, Table 320, p. 467). Public four-year institutions’
current revenues other than tuition and fees are equally divided between sources of revenues
that contribute, at least in part, to the costs of educating students (federal, state,
and local government appropriations; private gifts, grants, and contracts; and endowment
income) and revenues from sources (federal, state, and local government grants;
contracts; federally funded research and development centers; independent operations;
and sales and services) that generally support expenditures on activities other than
education. If all the funds provided by the first group of sources are used to support
educational expenses, taxpayers spent about $10,100 per FTE student in public fouryear
institutions for educational purposes. We assume that it would cost taxpayers
about $10,000 per FTE to provide additional education in a four-year public college or
university. We estimate that increasing education from some college to a college degree
will cost taxpayers about $20,000 in 2002 dollars.
Finally, the extreme example we consider is increasing a student’s education from
high school dropout to college graduate. This would entail two more years of high
school and four years of college. The costs of providing this increase would be spread