The Cost of Remedial Education - Mackinac Center
The Cost of Remedial Education - Mackinac Center
The Cost of Remedial Education - Mackinac Center
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<strong>The</strong> <strong>Cost</strong> <strong>of</strong> <strong>Remedial</strong> <strong>Education</strong>:<br />
<strong>Mackinac</strong> <strong>Center</strong> for Public Policy How Much Michigan Pays When Students Fail to Learn Basic Skills<br />
14,848 FTE students enrolled in remedial courses. 20 <strong>The</strong> average cost <strong>of</strong> remedial education<br />
per FTE student is therefore $6,007 per year <strong>of</strong> remediation.<br />
In other words,<br />
granting our<br />
assumptions,<br />
employers in<br />
Michigan lose $400<br />
million to lost<br />
productivity or<br />
remedial expenses<br />
per year due to<br />
employees’ lack <strong>of</strong><br />
basic skills.<br />
Returning to our assumption that Michigan businesses have to address the lack <strong>of</strong><br />
basic skills only among high school dropouts, we note that there are approximately 29,000<br />
dropouts from Michigan high schools each year. 21 On average those dropouts leave high<br />
school 2.29 years before they should. If the cost to Michigan business is 2.29 times the cost<br />
<strong>of</strong> one year <strong>of</strong> remediation ($6,007) and there are 29,000 workers to remediate each year,<br />
then the total cost to employers <strong>of</strong> having workers who lack basic skills is around $400<br />
million each year. In other words, granting our assumptions, employers in Michigan lose<br />
$400 million to lost productivity or remedial expenses per year due to employees’ lack <strong>of</strong><br />
basic skills.<br />
Adding the $89 million spent by post-secondary institutions, the total cost <strong>of</strong> the lack<br />
<strong>of</strong> basic skills in Michigan is around $489 million annually. Simply calculating the costs to<br />
Michigan businesses in a different, but still conservative, way increases the total estimated<br />
cost <strong>of</strong> addressing the lack <strong>of</strong> basic skills in Michigan to nearly a half-billion dollars per year.<br />
Table 2 – Calculating the Annual <strong>Cost</strong> <strong>of</strong><br />
<strong>Remedial</strong> <strong>Education</strong> in Michigan: Strategy 2<br />
Annual <strong>Cost</strong> to:<br />
In Millions <strong>of</strong> Dollars:<br />
Community Colleges $65<br />
Four-Year Colleges $24<br />
Businesses $400<br />
Total<br />
$489 (rounded to the nearest million)<br />
Strategy 3: <strong>The</strong> <strong>Cost</strong> <strong>of</strong> Producing a “Successful” High<br />
School Graduate<br />
In Strategy 3, we independently estimate the cost <strong>of</strong> providing remedial education for<br />
post-secondary institutions as well as for employers. First we calculate how much it costs<br />
high schools to provide students with basic skills. We then assume that the cost to postsecondary<br />
institutions and businesses to remediate the lack <strong>of</strong> basic skills is the same as the<br />
cost to high schools <strong>of</strong> producing “successful” graduates. By “successful” graduate we mean<br />
a student who receives a diploma and is not lacking in basic skills. We multiply the perstudent<br />
cost for high schools to produce successful graduates by the number <strong>of</strong> students who<br />
20<br />
21<br />
<strong>The</strong> number <strong>of</strong> full-time equivalent students receiving remedial education at four-year colleges and<br />
universities was computed from course enrollment data. <strong>The</strong> number <strong>of</strong> full-time equivalent<br />
students receiving remedial education at community colleges was estimated by multiplying their<br />
total enrollments by 6.3 percent, which is the portion <strong>of</strong> revenues devoted to remedial services.<br />
According to the Michigan Department <strong>of</strong> <strong>Education</strong> there were 120,776 8 th -graders in 1994. Five<br />
years later when those students should have been graduating there were only 91,691 graduates.<br />
<strong>The</strong> difference <strong>of</strong> roughly 29,000 are those who dropped out.<br />
12 September 2000