Private Colleges and Universities Generate Over $590 Billion in Economic Impact Nationwide

April 28, 2021

Private, nonprofit colleges and universities play significant roles in the everyday lives of those living and working in college communities and are important contributors to the nation as a whole. In fact, America’s private, nonprofit colleges and universities are a vital economic engine to the nation, generating $591.5 billion in economic impact in 2018-19, according to the findings of a new report released Wednesday by the National Association of Independent Colleges and Universities (NAICU).
The report, Private, Nonprofit Higher Education: Shaping Lives and Anchoring Communities tells the story of the economic, social and cultural vitality that private, nonprofit colleges and universities add to communities, regions and the nation.  It also demonstrates how America’s private, nonprofit colleges and universities are in a unique position to not only help but lead the acceleration of post-pandemic economic progress so desperately needed across the nation.
The study, conducted by Parker Philips, Inc., a nationally recognized consulting firm specializing in economic impact analysis, also found private, nonprofit colleges and universities:
  • Directly employ more than 1.1 million people as part of day-to-day operations and support and sustain a combined total of 3.4 million full-time and part-time jobs.
  • Generate a total of $77.6 billion in local, state, and federal tax revenue annually as a result of operations, student spending, and visitor spending.
  • Account for $2.8 billion in combined charitable giving and volunteerism.  It is estimated that staff, faculty and students of private, nonprofit colleges and universities give more than $747.5 million annually in charitable donations and volunteer for 86.8 million hours, valued at another $2 billion.
“It is indisputable that America is better off because of the economic opportunity, cultural enrichment and societal impacts of private, nonprofit colleges and universities,” said Barbara K. Mistick, D.M., president of NAICU. “This critical sector of America’s economy is a springboard for leading our nation most rapidly and effectively to renewed vitality, as we leave behind the pain and challenges of the COVID-19 pandemic and embrace the new beginnings of a vigorous and fulfilling future.”
The report found that over the course of their 40-year careers, the 584,000 bachelor’s degree recipients at private, nonprofit colleges and universities in 2019 will earn $3.1 trillion, support and sustain a cumulative total of 17.4 million jobs, and generate $382 billion in tax revenue at the local, state, and federal levels.
“Private, nonprofit higher education is a partnership between students and alumni, faculty and staff, donors and trustees, neighborhoods and local businesses, to build a stronger community - and a shared culture,” said Mistick.  “It is clear that investing in private, nonprofit higher education pays both short- and long-term dividends for all Americans and is a lynchpin in shaping a brighter future for our nation and the world.”
An integral part of the nation’s 5,300-instituton higher education ecosystem, America’s 1,700 private, nonprofit colleges and universities:
  • Graduate more than a million students annually.
  • Enroll nearly 21% of students, which represents over five million students.
  • Confer nearly 30% of undergraduate degrees and 45% of both master’s and doctoral degrees.
  • Account for $71.7 billion in total research expenditures, resulting in an economic impact of $193.6 billion, supporting and sustaining 907,811 jobs, and generating $21.7 billion in local, state, and federal taxes.
“America is a nation of college towns,” said Mistick.  “Rural, suburban and urban communities throughout the country benefit from the volunteer and philanthropic spirit embodied at many private, nonprofit colleges and universities. This spirit of giving back is rooted in the founding missions of private, nonprofit colleges and universities.”
Private, nonprofit colleges are changing outcomes for students of all incomes and backgrounds – enrolling roughly the same percentage of Pell Grant recipients (38%) as do public institutions (40%).  Private institutions also enroll similar percentages of students from underrepresented groups, and by gender and age as public institutions. Earning a bachelor’s degree boosts the median salary of an individual by 67.3% from a high school diploma.
“The $591.5 billion impact of private, nonprofit higher education on the U.S. economy tells only a fraction of the story regarding how this sector is transforming individual lives and communities across the country,” said Nichole Parker, president of Parker Philips. “The diversity of individual colleges and universities and their students help build community economic strength.”
The full economic impact report is available at

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