UA’s Ed Policy Center to Study Return on Investment of State’s Universities

TUSCALOOSA, Ala. — How much does the state of Alabama benefit from its 14 four-year universities?

While most of the schools in the state, including The University of Alabama, have conducted return-on-investment studies before, none have examined ROI at a statewide level, according to Dr. Stephen Katsinas, director of the Education Policy Center at UA. A more accurate representation for each school’s impact on its local community and region of the state, which will provide more detailed and useful data, requires a different model and factors.

Katsinas and the UA Education Policy Center have been commissioned by the Higher Education Partnership of Alabama to study the per-dollar return on the state’s investment in its public universities and what they contribute to their respective regions and local labor markets. The study is tentatively scheduled to be completed in March 2015.

“We’ll be using the nationally-recognized economic measurement standards from the Bureau of Economic Analysis, which incorporates regional multipliers to generate a per-dollar giveback,” said Jonathan Koh, research coordinator for the project. “This model can be used to produce a more precise tool for determining the optimal level and type of state funding for the maximization of economic growth.”

Katsinas said the timing of the study is important as the state and country rebounds from the 2008 economic recession. The report can positively impact legislators’ decisions in state appropriations for four-year universities in the state.

“The indirect benefits, like construction, the sales tax figures and local economies, are important, but harder to measure,” Katsinas said. “We’ll take a very close look at these issues for each region and the state as a whole. We believe that this story has not been told as well as it could be.”

The UA Education Policy Center will be assisted by a team of out-of-state researchers, Katsinas said. The center has produced 19 different finance surveys and studies of Pell Grants since 2011. Previous studies have been presented on Capitol Hill. The Center is also nationally known for its annual National Survey of Access and Finance Issues.

Gordon Stone, executive director of the Higher Education Partnership, said that Alabama’s public universities turned to the Education Policy Center because of its long record on key national and state higher education issues in the Deep South.

“The EPC’s studies of Pell Grants have been presented on Capitol Hill, and its annual surveys of access and finance issues are highly respected in the national and state higher education issues in the Deep South,” Stone said. “Turning to the EPC was a natural for us, and we look forward to a long-term relationship.”