Attaining a college degree can transform an individual’s economic prospects and provide significant advantages over the course of their life. For example, college graduates can expect to earn between $400,000 and $1.2 million more in their lifetimes when compared to high school graduates.
The advantages related to college enrollment and attainment are well-documented, as are the general benefits states can expect from increased college enrollment and college completion rates. Our research provides insights on:
- The advantages that college enrollment can confer to Black students in Florida
- How the state can benefit as a result
- The role of Florida’s Historically Black Colleges and Universities (HBCUs) in educating Black students
Here, you will find key findings and insights from an innovative research project, created in partnership with The Institute of Higher Education at the University of Florida, that examines the impact of college enrollment on the prospects of Black high school graduates in Florida and the impact on the state as a whole.
About the research
Our core research questions centered on the impact of college enrollment among Black students in Florida including:
- How does initially enrolling in a community college or four-year institution impact Florida’s Black high school students’ postsecondary, economic and financial success?
- How is the state of Florida impacted by its Black high school graduates initially enrolling in a community college or four-year institution?
- How does initially enrolling in an HBCU impact Florida’s Black high school students’ postsecondary, economic and financial success?
- How is the state of Florida impacted by its Black high school students initially enrolling in an HBCU?
This project used one of the largest student-level datasets in the U.S., following Black students throughout the state of Florida from high school, through college, and tracking their financial outcomes in November 2017, around age 30.
The breadth and depth of the data, described below, allows us to use rigorous methods and consider a wide range of impacts related to initial HBCU enrollment. The base data consist of all Black high school students in the state of Florida who took the SAT between 2004 and 2010. These data included test scores, high schools enrolled, basic demographics (including parental income and education), and the individual colleges to which students sent their SAT score, which represents a validated proxy for college applications.
To create the analytic dataset, we merged SAT data with National Student Clearinghouse data, which contain information about college enrollment spells, any degrees earned, and the types of degrees earned.
The final step to create the analytic dataset included merging credit bureau data, which has hundreds of financial variables for the students in a November 2017 snapshot, when the former students are around age 30, including an estimated household income, credit score, student loan balance and repayment, default, credit card debt, mortgages, and zip code of residence.
HBCUs in Florida
HBCUs represent an important option for Black students in Florida who are considering education after high school. Among the 96,710 Black high school students who took the SAT and graduated from a high school in Florida between 2004 and 2010, approximately 35% (35,380 individuals) sent an application to at least one HBCU in the U.S. Of these applicants, 40%initially enrolled at an HBCU.
Florida is home to four HBCUs. Black students who are enrolled at these four institutions account for 16%of all Black college students in Florida. This percentage indicates that Florida HBCUs educate a large share of Black college students in the state. In fact, Florida HBCUs graduate more Black students in STEM disciplines than all other Florida universities combined.
Historically Black Colleges & University (HBCU) enrollment increases the estimated household income for Black students in Florida by 6.8%.
Black students in Florida benefit from going to college
Enrolling in college has a positive influence on numerous academic and economic outcomes for Black high school students in Florida. In addition to the benefits these improved outcomes confer to individuals, they also have the potential to contribute to meaningful gains for the state.
Enrolling initially at a four-year institution is the most viable pathway for Black students to earn a bachelor’s degree. Doing so leads to a 42.9%point increase in the probability of earning a bachelor’s degree when compared to students who did not initially enroll in college and an approximately 30 percentage point increase when compared to students who initially enroll in a two-year college.
Similarly, enrollment at an HBCU is associated with increased likelihood that Black students will complete college and earn a degree. The probability of completing college increases by 7.9 percentage points for Black students enrolled at an HBCU, an increase that is a function of bachelor’s degree completion.
Attending an HBCU increases the probability that a Black student will earn a bachelor’s degree by 13.5 percentage points (about a 40% increase).
The long-term value of investing in college is clear
College-going is a long-term investment that can involve substantial upfront costs. These costs often take the form of student loan debt and the opportunity cost of not entering the workforce.
However, enrolling in college is associated with significant economic advantages. Black students who initially enroll at a four-year institution increased their estimated household income around age 30 by 9.6%. Similarly, HBCU enrollment increases the estimated household income for Black students in Florida by 6.8%.
Enrolling initially at a four-year institution is the most viable pathway for Black students in Florida to earn a bachelor’s degree.
The value of college enrollment
Calculating the Net Present Value (NPV) of enrolling in college offers compelling insight into the long-term economic gains Black students may experience as a result of enrolling in college.
This is because NPV is a measure that captures the total value for a student of investing in going to college, not just estimated earnings. It is the discounted sum of streams of estimated income in years not enrolled in college less net tuition for each year enrolled in college.
A positive NPV means that students will likely benefit financially from investing in going to college. For Black students who initially enroll in a four-year college or university, after 35 years the NPV of their investment is more than $130,000.
The ROI of college enrollment for Black students in Florida is significant
HBCU enrollment increases the estimated household income for Black students in Florida by 6.8%. While this increase in earnings comes at the expense of higher tuition (compared to other college options), after 15 years, the net present value of HBCU enrollment turns positive because the higher household incomes overtake those higher tuitions.
HBCU enrollment delivers meaningful long-term value
Increasing college enrollment rates can lead to significant economic gains for Florida
The increases in educational attainment and household income that result from higher rates of college enrollment are beneficial for the state of Florida. The largest state-level returns are associated with Black students who initially enroll at an in-state four-year college or university. Compared to individuals who do not enroll in college, the average estimated household earnings increase by $6,492 for two-year college enrollees and $8,583 for four-year college enrollees. Other state-level benefits associated with increased degree attainment and higher earnings among Black students include:
- Reduced expenditures on social and economic assistance programs
- Improved health outcomes and lower mortality rates
- Better education outcomes for children
- Better workforce productivity
- Increased civic participation
Increasing the number of Black students who enroll in college—especially four-year institutions—can meaningfully strengthen Florida’s economy.
How HBCUs benefit Florida
As previously noted, Florida’s HBCUs play a pivotal role in the education of Black college students in the state. Among the positive impacts HBCUs have, the increased earning power enrollees benefit from is notable. Enrolling at an HBCU increases yearly estimated household earnings by 6.8%, or approximately $3,600.
However, not all individuals who initially enroll at an HBCU live in Florida around age 30. Adjusting for individuals who live elsewhere, HBCU enrollment increases the average estimated yearly household earning in Florida by $2,707 per enrollee.
The significance of increased household incomes is multi-faceted. Higher incomes have the potential to strengthen the financial positions of individual Floridians and their families, and, at the same time, higher incomes correspond (on average) with higher rates of consumer spending and consumption. In turn, increased consumption strengthens Florida’s economic condition and increases state sales tax revenues. For example, if individuals spend all the additional $2,707 that results from enrolling in an HBCU (previously discussed), then that corresponds to $162 in additional sales tax annually per HBCU enrollee.
What Florida can do
Increasing college enrollment rates among Black high school graduates in Florida has the potential to generate the dramatic upward shifts in degree completion rates, increased earnings over time, and increased likelihood of in-state students to remain in the state. Taken together, these impacts suggest a net benefit for Black students and the state alike.
Within this broader context Florida’s HBCUs can be understood as engines of social and economic improvement. HBCU enrollees are more likely to:
- Earn a degree
- Have higher annual earnings
- Experience corollary benefits from their educational attainment and earnings
Florida should prioritize investments designed to increase college attendance—especially in-state college attendance—among Black high school students.
There is also incentive for Florida to invest in increasing in-state HBCU enrollment among Black high school graduates, given the important role that HBCUs play in educating Black students in the state and preparing them for success. There is also incentive for Florida to sustainably fund HBCUs in the state to ensure that these institutions are properly resourced.
In concert with these investments, Florida would benefit in numerous ways by investing further in state-sponsored need-based financial aid and increasing subsidies to colleges and universities to make college more affordable, thereby mitigating one of the most significant barriers facing students who seek to enroll in a postsecondary institution.