45,000 Jobs, $224 Million in Tax Revenues Could Be Lost If "Free" Tuition Plan Goes Forward, Says New Report

News Date: 3/9/2017

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Albany, NY – The proposed Excelsior Scholarship Program threatens the long-term viability of many private, not-for-profit colleges and universities, with potentially devastating consequences to local economies says a new report from Commission on Independent Colleges and Universities (CICU) in New York.

The report uses a Georgetown University’s Center on Education and the Workforce analysis of a similar plan put forth by former Senator Hillary Clinton’s presidential campaign in 2016 (The Enrollment Effects of Clinton’s Free College Proposal), and an analysis of the economic impact of private, not-for-profit colleges and universities New York State prepared by the Center for Governmental Research.

The analysis concluded that there would be significant enrollment reductions at private, not-for-profit colleges and universities with accompanying negative economic effects. Gauging the implications of such a plan is challenging and factors such as institution mission, recruiting strategy, and location weigh heavily on potential outcomes. Applying the Georgetown Center’s findings in the context of New York State, the report concludes that significant job losses in the Independent Sector could result from the adoption and implementation of the Excelsior Scholarship Program.

“We already are seeing negative effects from just the discussion of ‘free’ tuition and price controls," said CICU president Mary Beth Labate. “Words move markets. Enrollment is in jeopardy, capital projects have been put on hold and campuses are making plans for a series of layoffs in the coming months to close potential gaps.” 

More than 100 private, not-for-profit colleges and universities in New York state collectively educate more than 491,000 undergraduate and graduate students. Thirty-nine percent of students enrolled in college in New York state attend a private, not-for-profit institution. The Independent Sector confers 51 percent of bachelor’s degrees and 72 percent of master’s degrees and 79 percent of doctoral and first professional degrees earned in New York State.

Statewide, each student enrolled at a private, not-for-profit college or university is associated with 0.83 total jobs (direct, indirect, and induced). Assuming adoption and implementation of “free tuition” at public colleges and universities for families earning less than $125,000 annually in New York State, private, not-for-profit colleges and universities could see enrollment losses between seven and 15 percent (median, 11%). Overall enrollment losses of 11 percent would put nearly 45,000 direct and indirect/induced jobs in jeopardy. On average, these lost jobs would lead to a shortfall of $224.3 million in tax revenues.  

The study further breaks down the statewide financial impact into ten regions, each aligning with the Regional Economic Development Councils (REDC) of New York state:

Capital District:

Estimated drop of 4,351 students could lead to regional job losses of 2,646 positions and $11.1 million in lost tax revenues.

Central New York:

Estimated drop of 4,067 students could lead to regional job losses of 2,269 positions and $9.8 million in lost tax revenues.

Finger Lakes:

Estimated drop of 4,612 students could lead to regional job losses of 4,432 positions and $24.7 million in lost tax revenues.

Long Island:

Estimated drop of 4,892 students could lead to regional job losses of 2,281 positions and $9.1 million in lost tax revenues.

Mid-Hudson:

Estimated drop of 5,622 students could lead to regional job losses of 2,856 positions and $11.2 million in lost tax revenues.

Mohawk Valley:

Estimated drop of 872 students could lead to regional job losses of 506 positions and $2 million in lost tax revenues.

New York City:

Estimated drop of 23,562 students could lead to regional job losses of 23,967 positions and $132.4 million in lost tax revenues.

North Country:

Estimated drop of 852 students could lead to regional job losses of 505 positions and $2 million in lost tax revenues.

Southern Tier:

Estimated drop of 2,500 students could lead to regional job losses of 3,853 positions and $18 million in lost tax revenues.

Western New York:

Estimated drop of 2,749 students could lead to regional job losses of 1,377 positions and $3.8 million in lost tax revenues.

About The Commission on Independent Colleges and Universities in New York
Founded in 1956, The Commission on Independent Colleges and Universities (CICU) in New York represents the chief executives of New York's 100+ independent (private, not-for-profit) colleges and universities on issues of public policy. Member colleges compose the largest private sector of higher education in the world and confer most of the bachelor’s degrees (51%), master’s degrees (72%), and doctoral and first-professional degrees (79%) earned in New York state.

Click here to download the report, including regional impact.