Valencia Boosts Local Economy by $1 Billion a Year, Study Finds
Tuesday, May 1, 2012
At a time when Florida’s unemployment rate is 9.4% and public funding for higher education is being cut, a new study finds that Valencia College boosts the economy of Orange and Osceola counties by $1.05 billion a year.
The study, conducted by Economic Modeling Specialists, Inc. (EMSI) on behalf of the college, calculated the college’s total economic impact, based on the 70,000 students enrolled at Valencia, and includes alumni earnings, student spending and expenditures related to college operations.
The impact study also examined the college’s return on investment, for both students and taxpayers.
- For students, every dollar spent on tuition today increases a student’s future income by $5.60, according to the EMSI study.
- For Florida taxpayers, the rate of return on their investment in the college is 8.9 percent, outperforming nearly all private investments’ return on the dollar.
Valencia, the 17th largest employer in the region, has become an economic engine for Central Florida, generating close to 3,000 jobs and spending $231 million a year on buildings, salaries, services and supplies.
In addition to the impact of students currently enrolled at the college, the study found that Valencia’s graduates contribute $781.7 million in earnings, spending and savings to the region’s economy each year.
To understand Valencia’s economic impact on its two-county region, compare the college’s $1 billion impact to that of the University of Florida. In 2011, an economic impact study found that UF’s impact on the statewide economy was $8.76 billion – and $2.9 billion of that was attributed to the Shands Hospital system and UF physician practices.
“Valencia is a billion dollar gem. We hope the independent study will help the community understand what an asset Valencia actually is to the region,” said Valencia Board of Trustees Chair Bertica Cabrera Morris.
Trustees, along with Valencia President Sandy Shugart, are calling on business and community leaders to join the college’s efforts to increase public and private investment in Valencia.
“We encourage business leaders to get involved with the college and become a part of its success. Seek Valencia interns. Hire the college’s graduates. Serve on industry boards. Support the foundation. It all fuels our local economy and makes a real difference,” added Cabrera Morris.
Valencia stands out as a model of efficiency compared to its peer colleges around the state. Based on data gathered by the Florida Department of Education for the 2011-2012 school year, Valencia has lower funding per FTE (full-time equivalent) than its sister two-year colleges – and yet Valencia consistently produces more graduates and more students who are earning technical certificates.
Valencia was named the best community college in America for 2011/12 when it won the Aspen Prize for Community College Excellence. The Aspen Prize was the first national recognition of extraordinary accomplishments at a community college. Valencia won the honor for an overall graduation rate nearly three times that of similar, large urban public community colleges. In addition, Valencia had the highest job placement rates at 95 percent, and the most productive transfer program in the country, because of its partnership with UCF.
Valencia plays a key role in educating the region. Of the graduating high school seniors in Orange and Osceola counties, almost twice as many start their college careers at Valencia as at all other state universities combined. And, today, that’s the new “normal” among college students. Only 25 percent of America’s college students are full-time students, living away from home. Seventy-five percent of current college students are part-time students, juggling families, jobs and school.
At Valencia, 39 percent of the students are focused on learning specialized skills that prepare them for the workforce through the college’s Associate in Science (A.S) programs or Associate in Applied Science (A.A.S.) degrees. To produce graduates who are ready to hit the ground running, the college works closely with 400 area businesses to tailor the curriculum to meet the needs of the workplace.
In some technical areas, such as nursing and allied health, Valencia graduates make up a large percentage of the local workforce. Valencia’s RN program supplies many of the nurses to local hospitals and is highly regarded for its quality. In 2010, for example, 94 percent of Valencia’s nursing graduates passed the national registered nursing exam – a higher passing rate than the state and national average.
That specialized training is reflected in the graduates’ earnings. Valencia’s Associate in Science and Associate in Applied Science degree graduates earn on average an annual salary of about $43,385 in their first year after graduation – more than double that of a high school graduate and $7,839 more than a bachelor’s degree graduate from UCF in their first year out of college, according to the latest data from the Florida Education and Training Placement Information Program (FETPIP).
In addition to preparing students for the workforce, Valencia offers a two-year A.A. program that prepares students to transfer to an upper-division college or university – at half the cost of tuition at the state’s four-year universities.
And, thanks to DirectConnect to UCF, an innovative partnership between the University of Central Florida and area members of the Florida College System that began in 2007, Valencia students who earn an associate degree are guaranteed admission to UCF’s upper division. Through DirectConnect, Valencia has become an “on ramp” to a four-year degree. In 2011, 22 percent of all UCF graduates started their college careers at Valencia.
Also helping the local economy is the fact that Valencia is attracting more students from outside Orange and Osceola counties. Since DirectConnect began, the number of students moving to the area grew from 14,967 to 21,134, a 34.5 percent increase. These students rent apartments, purchase goods and services, and stay in the area to attend UCF and build their lives here.
Economic Impact Report – Overview Fact Sheet
• Valencia served 64,319 students in the 2010-11 reporting year.
• The average Valencia student’s income increases by $5.60 for every dollar invested in their Valencia education.
Students enjoy an attractive 15.1% average rate of return on their Valencia educational investment, recovering all costs in 10.2 years.
• Higher earnings of Valencia students and associated increases in state income expand the tax base in Florida by about $196.5 million each year.
• Florida will see avoided social costs amounting to $11.3 million per year due to improved health, reduced crime, and reduced welfare and unemployment.
• The state government allocated approximately $106 million in support of Valencia in FY 2010-11.
• For every dollar of this support, taxpayers see a return of $2.80 (in the form of higher tax receipts and avoided costs).
• State government sees an annual rate of return of 8.9% on their support for Valencia.
ECONOMIC GROWTH ANALYSIS
College Operations Effect
• The Valencia College Service Area economy annually receives $122.9 million in income due to Valencia operations.
Student Spending Effect
• Valencia estimates that approximately 15% of its students come from outside the region.
• The expenditures of Valencia‘s non-local students generate roughly $16.0 million in added income in the Valencia College Service Area each year.
• The Valencia College Service Area economy embodies an estimated 5.6 million credits that have accumulated over the past 30-year period as thousands of former Valencia students enter the workforce.
• Valencia credits translate to higher earnings for students and increased output of businesses. The added income attributable to the accumulation of Valencia credits in the workforce amounts to around $781.7 million each year.
Transfer Student Effect
• The DirectConnect relationship between Valencia and the University of Central Florida (UCF) allows students to continue their post-secondary education.
• The additional education of students that transfer to UCF generates an additional $126.4 million1 in income to the region each year.
• Added income attributable to the accumulation of Valencia skills amounts to $781.7 million each year
• The total annual impacts on the Valencia College Service Area sum to $1.047 billion.
1This value is distinct from the other impact metrics in that it is the result of a cooperative agreement between Valencia and UCF. Both institutions might rightly claim this impact.
The full report, “Economic Contribution of Valencia College,” is available at http://news.valenciacollege.edu/impact
Tags: Bertica Cabrera Morris, billion, college students, community colleges, crime prevention, Direct Connect, economic impact, economy, education, employer, Florida Department of Education, Florida State College System, graduates, investment, jobs, orange county, Osceola County, return on investment, Sandy Shugart, state budget, state colleges, students, tax dollars, taxpayers, UCF, University of Florida, Valencia President, workforce