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College degrees pay off most for African Americans in Calif., study finds

10:13 AM, Jun 19, 2012   |    comments
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More than any other group in California, African Americans stand to gain the most significant lift out of poverty from earning a college degree, according to a new report.

Taking a deeper look at data from a study it released in April, the nonprofit Campaign for College Opportunity this month released more detailed snapshots of African American [PDF] and Latino [PDF] students, examining how they benefit from varying level of educational attainment in California.

To conduct the analysis, researchers from UC Berkeley and the California Census Research Data Center crunched data to estimate the revenues and costs of various levels of education - both for the state and for individuals. They used data from the U.S. Census, state funding for colleges and universities, average state expenses for social support programs and tax revenues.

The analysis showed that while college attendance and graduation result in economic payoff for all groups of students, a college degree provides the greatest payoff to African American students in terms of reducing the years they'll spend living in poverty. Black students with a bachelor's degree will spend six fewer years in poverty than black students with a high school degree. That's a bigger gap than for any other ethnic group studied.

"Education is a powerful payoff for this particular community as it is for all, but there's a bigger impact here in terms of poverty and income," said Michele Siqueiros, executive director of The Campaign for College Opportunity. "In certain parts of the state, it's really significant."

And lifetime earnings for African Americans with a bachelor's degree - compared with earnings for African American high school graduates - have grown 85 percent over the past three decades after adjusting for inflation. That's more than the growth for other ethnic groups.

In fact, while a tough job market, growing student loan debt and the nation's struggling economy have led some to question the value of a college degree, the report shows that lifetime earnings for college graduates from all ethnic groups have continued to increase relative to earnings for high school graduates in the past 30 years.

The report estimates that aside from the payoff for individuals, the state reaps a rich return on its investment in higher education. For every dollar the state spends on the California State University and University of California systems, it gets $4.50 back in tax contributions, the study shows.

By age 38, a college graduate has contributed enough tax revenue to have fully repaid the state's initial investment. Any additional tax revenue they generate from their work over the next few decades is essentially a bonus for California, the report said.

"One of the things I really like about this report is that education is not just a civil rights issue, it's an economic issue," said Claudia Peña, statewide director for the California Civil Rights Coalition. "There is actually a return for the state."

Because of the sheer size of the population, Hispanic and Latino students - who represent 45 percent of the state's college-age and college-going population - also stand to bring a great windfall to the state in terms of return on education investment.

Latinos with a college degree earn $1.3 million more over their lifetimes than Latinos with a high school degree only.

Peña said the report shows not only that the state's investment is worth it, but also that educational opportunities should be targeted to groups that will benefit disproportionately from a college degree. California's Proposition 209 prohibits race-conscious outreach and financial aid.

"It has had a huge negative impact on folks of color accessing education, and because of that has had a negative economic impact on the state of California," Peña said.

Erica Perez
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