33 Chapter 3: Methodology Investment analysis is the process of evaluating total costs and measuring these against total benefits to determine whether or not a proposed venture will be profitable. If benefits outweigh costs, then the investment is worthwhile. If costs outweigh benefits, then the investment will lose money and is thus considered infeasible. To enroll in postsecondary education, the Business program’s students pay for tuition and forego monies that otherwise they would have earned had they chosen to work instead of attend college. From the perspective of students, education is the same as an investment; i.e., they incur a cost, or put up a certain amount of money, with the expectation of receiving benefits in return. The total costs consist of the tuition and fees that students pay and the opportunity cost of foregone time and money. The benefits are the higher earnings that students receive as a result of their education. Calculating student costs Business program student costs consist of three main items: direct outlays, opportunity costs, and future principal and interest costs incurred from student loans. Direct outlays include tuition and fees, equal to $8 million. Direct outlays also include the cost of books and supplies. On average, full-time students spent $2,213 each on books and supplies during the reporting year.25 Multiplying this figure by the number of full-time equivalents (FTEs) produced by SUNY WCC in FY 2021-2226 generates a total cost of $1.1 million for books and supplies. In order to pay the cost of tuition, many students had to take out loans. These students not only incur the cost of tuition from the college but also incur the interest cost of taking out loans. In FY 2021-22, students received a total of $196.1 thousand in federal loans to attend SUNYWCC’ Business program.27 Students pay back these loans along with interest over the span of several years in the future. Since students pay off these loans over time, they accrue no initial cost during the analysis year. Hence, to avoid double counting, the $196.1 thousand in federal loans is subtracted from the costs incurred by students in FY 2021-22. 25 Based on the data provided by SUNY WCC. 26 A single FTE is equal to 30 CHEs, so there were 295 FTEs produced by students in FY 2021-22, equal to 8,863 CHEs divided by 30. 27 Loan data was provided by SUNY WCC. Due to data limitations, only federal loans are considered in this analysis. Student investment analysis Student costs Student benefits Out-of-pocket expenses Opportunity costs Higher earnings from education
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