The McKissick Museum on the University of South Carolina campus. (provided by USC)
COLUMBIA — The University of South Carolina has an estimated 47,300 alumni working in the Midlands.
Because of their college degrees, they’re earning $28,000 more annually, on average, than a high school graduate who went straight to work, according to a semi-annual study on the economic impact of the state’s largest college system.
This most recent study comes as higher education experts warn about a pending “enrollment cliff” due to a declining national birth rate that has colleges competing over a shrinking pool of potential students.
“Education, of course, is USC’s primary mission and college graduates see many benefits, not the least of which is a lifetime earnings premium,” said Joey Von Nessen, the USC economist who authored the study.
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This, Von Nessen said, makes USC a hub for talent, both in Columbia and across the state.
“This is something that is extraordinarily important, particularly now as employers are needing more and more access to a high-skilled workforce,” Von Nessen said.
Labor shortages are a long-running issue nationwide due to the country’s aging population and ongoing retirement of the baby boomer generation. For South Carolina, a major retirement destination, this challenge is even greater as the state’s population is aging faster than the national average.
“So, this labor challenge is something that South Carolina is facing and is likely to face for the foreseeable future,” Von Nessen said. “Businesses in most industry sectors are struggling to find workers as a result.”
‘Enrollment cliff’
Meanwhile, with a shrinking college-age population and rising costs, universities are having to work harder to convince prospective students that a four-year college degree is worth the growing price tag.
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The national birth rate has been in decline and colleges are expected to start feeling the impact this year. It’s a trend that Gov. Henry McMaster said will continue well into the future as the birth rate in 2023 fell to a historic low — about 55 births for every 1,000 women between the ages of 15 and 44 — according to the National Center for Health Statistics.
“Not only is the number of college-age students declining, but in South Carolina, the percentage of our high school graduates who are enrolling in college in the fall immediately following graduation has declined,” McMaster wrote in his budget recommendations released earlier this month.
The rate of South Carolina public high school graduates who go on to seek a degree from one of the state’s public or private technical colleges or universities has gone from 62.5% in 2015 to about 60% in 2022, according to data from the state’s Education Oversight Commission.
Some South Carolina colleges, particularly the state’s research universities and coastal schools, have received a boost as students from northern states have flocked to southern schools in recent years — more than 3,700 freshmen in 2022 came from the five-state area including New York, New Jersey, Pennsylvania, Massachusetts and Connecticut alone, according to the state’s higher education agency. But other four-year schools in the state have struggled.
That is why the governor has again called for a $2 million study, to be conducted by researchers at the state’s employment agency, of the state’s 33 two- and four- year public colleges, looking at affordability and a possible need for mergers.
“The goal is to make sure we are preparing to meet our state’s future workforce needs,” the governor wrote.
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And when it comes to the cost, USC tuition for South Carolina residents is nearly $12,700 annually. Factor in room and board and the total cost nearly doubles, according to data from the National Center for Education Statistics.
Students who qualify can reduce that cost with scholarships.
Scholarships funded by state lottery proceeds can help in-state students who make good grades cover anywhere from $2,800 to $10,800 of the annual cost, depending on how well they perform academically and whether they choose to pursue degrees in high-demand career fields. Students with the greatest financial needs can receive an additional $3,500 in aid.
Brain drain
Finally, while USC is a source for talent, the state’s universities also have struggled to keep alumni working in South Carolina after graduation.
According to the state Commission on Higher Education, 57.5% of South Carolina natives who graduate from the state’s three public research universities stay in state for work. Only 15.5% of students who come to the universities from other states remain here.
Of students who graduate from USC’s main campus in Columbia, nearly 41% are still living and working in the Columbia area at least five years after receiving their diploma, Von Nessen said.
Von Nessen estimates the Midlands economy could see a nearly $19 million boost for every percentage point improvement in retention.
Everything included in that dollar amount goes well beyond increased wages earned by graduates. His study also factored in so-called spillover effects, such as increased spending at other area businesses as higher paid workers have more disposable income and subsequent wage improvements that flow down to non-college educated workers.