Economic Impact

$444.5 Million or 6,343 Supported Jobs

Hawkeye Community College 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) 2019–2020.

Economic Impact Analysis

In FY 2019–2020, Hawkeye added $444.5 million in income to the Hawkeye Service Area economy, a value approximately equal to 3.7% of the region’s total gross regional product (GRP). Expressed in terms of jobs, Hawkeye’s impact supported 6,343 jobs. For perspective, the activities of Hawkeye and its students support one out of every 19 jobs in the Hawkeye Service Area.

For the purposes of this analysis, the Hawkeye Service Area is comprised of 47 zip codes from Benton, Black Hawk, Bremer, Buchanan, Butler, Chickasaw, Fayette, Floyd, Grundy, and Tama Counties in Iowa.

Operations Spending Impact

Hawkeye employed 719 full-time and part-time faculty and staff. Payroll amounted to $29.6 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 $23.7 million on day-to-day expenses related to facilities, supplies, and professional services.

The net impact of the college’s operations spending added $35.6 million in income to the Hawkeye Service Area economy in FY 2019–2020.

Construction Spending Impact

Hawkeye invests in construction each year to maintain its facilities, create additional capacities, and meet its growing educational demands, generating a short-term infusion of spending and jobs in the Hawkeye Service Area economy.

The net impact of Hawkeye’s construction spending in FY 2019–2020 was $290.2 thousand in added income for the Hawkeye Service Area.

Student Spending Impact

Around 8% of students attending Hawkeye originated from outside the region. Some of these students relocated to the Hawkeye Service Area. In addition, some in-region students, referred to as retained students, would have left the Hawkeye Service Area for other educational opportunities if not for Hawkeye. 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 2019–2020 added $11.1 million in income to the Hawkeye Service Area economy.

Alumni Impact

Over the years, students have studied at Hawkeye and entered or re-entered the workforce with newly-acquired knowledge and skills. Today, thousands of these former students are employed in the Hawkeye Service Area.

The net impact of Hawkeye’s former students currently employed in the regional workforce amounted to $397.6 million in added income in FY 2019–2020.

Investment Analysis

Student Perspective

Hawkeye’s FY 2019–2020 students paid a present value of $13 million to cover the cost of tuition, fees, supplies, and interest on student loans. They also forwent $28.2 million in money that they would have earned had they been working instead of attending college.

In return for their investment, students will receive a cumulative present value $191.8 million in increased earnings over their working lives. This translates to a return of $4.70 in higher future earnings for every dollar students invest in their education. Students’ average annual rate of return is 23.9%.

Taxpayer Perspective

Taxpayers provided Hawkeye with $32.9 million of funding in FY 2019–2020. In return, they will benefit from added tax revenue, stemming from students’ higher lifetime earnings and increased business output, amounting to $51.7 million. A reduced demand for government-funded services in Iowa will add another $4.3 million in benefits to taxpayers.

For every dollar of public money invested in Hawkeye, taxpayers will receive $1.70 in return, over the course of students’ working lives. The average annual rate of return for taxpayers is 4.0%.

Social Perspective

In FY 2019–2020, Iowa invested $88.1 million to support Hawkeye. In turn, the Iowa economy will grow by $611.7 million, over the course of students’ working lives. Society will also benefit from $12 million of public and private sector savings.

For every dollar invested in Hawkeye in FY 2019–2020, people in Iowa will receive $7.10 in return, for as long as Hawkeye’s FY 2019–2020 students remain active in the state workforce.

Sources: Forbes S&P 500, 1991-2020. FDIC.gov, 6-2021.