Kentucky's state coffers could increase by $900 million a year if the state's higher education attainment rates increase to the national average, according to a new study.
The University of Kentucky's Center for Business and Economic Research estimated that increasing the percentage of working-aged Kentuckians with an associate's degree or higher from 33 percent to 40 percent would generate $500 million a year in state tax revenues and save the state another $400 million spent on health care and anti-poverty programs.
Kentucky ranks 44th in the nation.
To reach the national average, the number of Kentuckians with associates degrees would have to increase by about 30,000 and the number of residents with a bachelor's degree or higher would have to increase by about 145,000.
"While it's widely known that a college degree increases personal earnings, employment and improves health, this report makes very clear that raising educational attainment levels of our workforce generates tremendous benefits to our economy and makes a significant positive impact on the state's treasury and taxpayers," said Robert King, president of the Council on Postsecondary Education.
The UK study, which the council commissioned, also found that increasing educational attainment would move 33,000 households off of food stamps and 4,600 people off of unemployment benefits.
King has been citing numerous studies about the importance of higher education in the months leading up to the next budget session of the General Assembly in January. He hopes to persuade legislators to reverse eight years of state cuts — about $173 million total — to institution of higher education in Kentucky.
Education advocates say those cuts have slowed the state's rate of growth in educational attainment. For example, between 2000 and 2009, Kentucky ranked first in the country for improving six-year graduation rates and second for increasing associates degrees. Since 2010, those two rankings dropped to 41st and 24th, respectively.
The latest study found that higher education pays off in both urban and rural areas. For example, in Eastern Kentucky, a person with a bachelor's degree would see projected annual earnings of $42,663, compared to $29,003 for those with just a high school degree.
King noted that U.S. Census Data shows there aren't enough young students coming through the pipeline to raise bachelor's degree attainment rates to the national level, so colleges must find more ways to help working-aged adults. For example, the council is trying to get funding for a project called Commonwealth College, which would offer online, four-year bachelor's programs in areas such as auto manufacturing and health care. Western Kentucky University and the University of Louisville have already started similar programs of their own.
"We have to be able to re-engage adults," King said.