The Economic Value of Iowa Western Community College
Iowa Western Community College (IWCC) creates a significant positive impact on the business community and generates a return on investment to its major stakeholder groups—students, taxpayers, and society. Using a two-pronged approach that involves an economic impact analysis and an investment analysis, this study calculates the benefits received by each of these groups. Results of the analysis reflect fiscal year (FY) 2019-20.
Economic Impact Analysis
In FY 2019-20, IWCC added $176.3 million in income to the Iowa Western Service Area* economy, a value approximately equal to 2.1% of the region’s total gross regional product (GRP). Expressed in terms of jobs, IWCC’s impact supported 2,798 jobs. For perspective, the activities of IWCC and its students support one out of every 32 jobs in the Iowa Western Service Area.
Operations Spending Impact
- IWCC employed 763 full-time and part-time faculty and staff. Payroll amounted to 31.6 million, much of which was spent in the region for groceries, mortgage and rent payments, dining out, and other household expenses. The college spent another 23.6 million on day-to-day expenses related to faculties, supplies, and professional services.
- The net impact of the college’s operations spending added $33.8 million in income to the regional economy in FY 2019-20
Construction Spending Impact
- IWCC invests in construction each year to maintain its faculties, create additional capacities, and meet its growing educational demands, generating a short-term infusion of spending and jobs in the regional economy.
- The net impact of IWCC’s construction spending in FY 2019-20 was $2.1 million in added income for the Iowa Western Service Area.
Student Spending Impact
- Around 23% of credit students attending IWCC originated from outside the region. Some of these students relocated to the Iowa Western Service Area. In addition, some in-region students, referred to as retained students, would have left the Iowa Western Service Area for other educational opportunities if not for IWCC. These relocated and retained students spent money on groceries, mortgage and rent payments, and other living expenses at regional businesses.
- The expenditures of relocated and retained students in FY 2019-20 added $11.6 million in income to the Iowa Western Service Area economy.
- Over the years, students have studied at IWCC and entered or re-entered the workforce with newly-acquired knowledge and skills. Today, thousands of these former students are employed in the Iowa Western Service Area.
- The net impact of IWCC’s former students currently employed in the regional workforce amounted to $128.9 million in added income to FY 2019-20
- IWCC’s FY 2019-20 students paid a present value of $21.1 million to cover cost of tuition, fees, supplies, and interest on student loans.
- In return for their investment, students will recieve a cumulative present value $208.6 million in increased earnings over their working lives. This translates to a return of $6.70 in higher future earnings for every dollar students invest in their education. Students’ average anual rate of return is 26.5%.
- Taxpayers provided IWCC with $30.3 million of funding in FY 2019-20. In return, they will benefit from added tax revenue, stemming from students’ higher lifetime earnings and increased business output, amounting to $46.6 million. A reduced demand for government-funded services in Iowa will add another $4.8 million in benefits to taxpayers.
- For every dollar of public money invested in IWCC, taxpayers will receive $1.70 in return, over the course of students’ working lives. The average annual rate of return for taxpayers is 2.5%.
- In FY 2019-20, Iowa invested $81.8 million to support IWCC. In turn, the Iowa economy will grow by $578.7 million, over the course of students’ working lives. Society will also benefit from $13.3 million of public and private sector savings.
- For every dollar invested in IWCC in FY 2019-20, people in Iowa will receive $7.20 in return, for as long as IWCC’s FY 2019-20 students remain active in the state workforce.