Economic Impact Study
The Economic Value of Montgomery College
Montgomery College (MC) 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 FY2023.
| Impact | Dollar Value |
|---|---|
| Operations Spending Impact | $243.7 million |
| Student Spending Impact | $49.5 million |
| Alumni Impact | $1.1 billion |
| Total Economic Impact | $1.4 billion |
| Jobs Supported | 14,998 |
Economic Impact Analysis
In FY2023, MC added $1.4 billion in income to the Montgomery County economy, a value approximately equal to 1.4% of the region’s total gross regional product (GRP). Expressed in terms of jobs, MC’s impact supported 14,998 jobs. For perspective, the activities of MC and its students support one out of every 51 jobs in Montgomery County.
Operations spending impact
- MC employed 4,036 full-time and part-time faculty and staff. Payroll amounted to $246.2 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 $62.4 million on its expenses related to facilities, supplies, and professional services (excluding construction).
- The net impact of the college’s operations spending added $243.7 million in income to the regional economy in FY2023.
Student spending impact
- Around 11% of students attending MC originated from outside the region. Some of these students relocated to Montgomery County. In addition, some in-region students, referred to as retained students, would have left Montgomery County for other educational opportunities if not for MC. 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 FY2023 added $49.5 million in income to the Montgomery County economy.
Alumni impact
- Over the years, students have studied at MC and entered or re-entered the workforce with newly acquired knowledge and skills. Today, hundreds of thousands of these former students are employed in Montgomery County.
- The net impact of MC’s former students currently employed in the regional workforce amounted to an estimated $1.1 billion in added income in FY2023.
Investment analysis
Average annual return for MC Students: 18.3%
Stock Market 30-year average annual return: 10.1%
Interest earned on savings account (national deposit rate): 0.5%
(Source: Forbes' S&P 500, 1992-2022; FDIC ..gov, 2-2022)
Student perspective
- MC’s FY2023 students paid a present value of $66.4 million to cover the cost of tuition, fees, supplies, and interest on student loans. They also forwent a value of $139.7 million in time and money had they been working instead of attending college.
- In return for their investment, students will receive a cumulative present value of $964.6 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 18.3%.
Taxpayer perspective
- Taxpayers provided MC with $278.7 million of funding in FY2023. In return, they will benefit from added tax revenue, stemming from students’ higher lifetime earnings and increased business output, amounting to $278.2 million. A reduced demand for government-funded services in Maryland will add another $44.7 million in benefits to taxpayers.
- Total taxpayer benefits amount to $322.9 million, the present value sum of the added tax revenue and public sector savings. For every dollar of public money invested in MC, taxpayers will receive $1.20 in return over the course of students’ working lives. The average annual rate of return for taxpayers is 1.6%.
Social perspective
- In FY2023, MC and its students experienced $466.7 million in costs. In turn, the Maryland economy will grow by $3.4 billion, over the course of students’ working lives. Society will also benefit from $79.9 million of public and private sector savings.
- For every dollar invested in MC in FY2023, people in Maryland will receive $7.40 in return, for as long as MC’s FY2023 students remain active in the state workforce.
$4.70 ... Students gain in lifetime earnings
$1.20 ... Taxpayers gain in added tax revenue and public sector savings
$7.40 ... Society gains in added income and social savings
- Economic Impact Study 2022-2023 Fact Sheet (PDF,
) - MC Report 2022-2023 (PDF, )
- MC Executive Summary 2023 (PDF, )
- MC Infographic (PDF, )
Economic Impact Reports (2021)
- Full Report (PDF, ) (Executive Summary only (PDF, ) )
- Summary One-Sheet "Quick Facts" Report (PDF, )
- Infographic (PDF, )
Did you know?
Altogether, the average annual added income to Montgomery County due to the activities of Montgomery College and its graduates equals $1.4 billion. This represents nearly 1.8% of the total Montgomery County economy and an 5.2% return rate for taxpayers on every dollar invested in the College. Additionally, every dollar that a student invests in their education they receive $3.30 in return in the form of higher future earnings. That's a 14% return on their investment!
EMSI’s 2016 Economic Impact Study (EIS) estimates the impact of Montgomery College in terms of job and income formation, higher earnings captured by students, returns to taxpayers, and a broad collection of social benefits and avoided costs. The Economic Impact Study was last updated and posted on December 14, 2016. For previous versions of the 2008 and 2012 Economic Impact Study, please contact bo.chan@montgomerycollege.edu.
Economic Impact Analysis at a Glance
- MC employed 3,189 full-time and part-time employees in FY 2015-16. Payroll amounted to $244.6 million, much of which was spent in Montgomery County to purchase groceries, clothing, and other household goods and services. The college spent another $99.7 million to support its day-to-day operations.
- The net impact of college payroll and expenses in Montgomery County during the analysis year was approximately $257.7 million in income.
- A number of students would have left the county if not for MC. These retained students spent money on groceries, transportation, rent, and so on at county businesses.
- The expenditures of retained students during the analysis year added approximately $25.1 million in income to the Montgomery County economy.
- Over the years, students have studied at MC and entered or re-entered the workforce with newly-acquired skills. Today, thousands of these former students are employed in Montgomery County.
- The accumulated contribution of former students currently employed in the county workforce amounted to $1.1 billion in added income during the analysis year.
Impacts Created by MC in FY 2015-16
Operations Spending Impact:
Added Income: $257.7 Million, Jobs: 3,423
Student Spending Impact:
Added Income: $25.1 Million, Jobs: 750
Alumni Impact:
Added Income: $1.1 Billion, Jobs: 11,955
- MC’s FY 2015-16 students paid a total of $90.2 million to cover the cost of tuition, fees, and supplies. They also forwent $443.4 million in money that they would have earned had they been working instead of learning.
- In return for the monies invested in the college, students will receive a present value of $1.8 billion in increased earnings over their working lives. This translates to a return of $3.30in higher future earnings for every $1 that students invest in their education. The average annual return for students is 14.0%.
- In FY 2015-16, state and local taxpayers in Maryland paid $238.4 million to support the operations of MC. The net present value of the added tax revenue stemming from the students’ higher lifetime earnings and the increased output of businesses amounts to $399.7 million in benefits to taxpayers. Savings to the public sector add another $34.6 million in benefits due to a reduced demand for government-funded services in Maryland.
- Dividing benefits to taxpayers by the associated costs yields a 1.8 benefit-cost ratio, i.e., every $1 in costs returns $1.80 in benefits. The average annual return on investment for taxpayers is 5.2%.
- The economic base in Maryland will grow by $4.9 billion over the course of the students’ working lives. Society will also benefit from $93.5 million in present value social savings related to reduced crime, lower unemployment, and increased health and well-being across the state.
- For every dollar that society spent on MC educations during the analysis year, society will receive a cumulative value of $6.10 in benefits, for as long as the FY 2015-16 student population at MC remains active in the state workforce.
For every $1 spent by ...
$3.30 gained in lifetime earnings for students.
$1.80 gained in added state revenue and social savings for taxpayers.
$6.10 gained in added taxes and public sector savings for society.
Contact
Lightcast's 2022-2023 Economic Impact Study (EIS) estimates the impact of Montgomery College in terms of job and income formation, higher earnings captured by students, returns to taxpayers, and a broad collection of social benefits and avoided costs. The Economic Impact Study was last updated and posted on January 28, 2025. For previous versions of the 2008 and 2012 Economic Impact Study, please contact Bo Chan (bo.chan@montgomerycollege.edu).