As a new class of students starts this fall at private nonprofit colleges across the state, it’s a reminder of the related economic benefits tied to everything from how students spend money off-campus to how they’ll contribute to the economy when they graduate.

“Private colleges are an asset to the community,” said Bruce Corrie, associate vice-president of university relations and professor of economics at Concordia University, St. Paul. “Yes, we play a critical role for the workforce. We’re economic engines.”

The economic impact of private colleges is particularly concentrated in Saint Paul, where five institutions have campuses serving traditional undergraduate students — Concordia University, St. Paul; Hamline University; Macalester College; St. Catherine University; and the University of St. Thomas.

The impact starts when families from farther away drop students off — and go out for meals and stay in hotels. Then there’s all the spending that students make throughout their education — on everything from a coat along Grand to a cup of coffee on Snelling. And picture what colleges are spending, including for employing staff, buying computers and constructing buildings.

Consider the University of St. Thomas, which is the largest private nonprofit college in the state. Adding up direct expenditures for goods and services by the university, its faculty, staff, students and visitors, St. Thomas reported that in fiscal year 2015 it had more than $165 million in direct spending in Saint Paul. And if indirect and induced spending are added in, the total impact in Saint Paul was more than $403 million.

The extent of the economic impact of nonprofit colleges is generally not well understood, said Mark Vangsgard, vice president for business affairs and chief financial officer, University of St. Thomas. “Maybe we don’t make breakfast cereal, soaps or sanitizers,” he said, “but what we do have is a great number of people whom we bring into the community.” The University of St. Thomas is a magnet, he noted, drawing the staff and faculty who work there, the new students who start each year and the many visitors who come as well.

Looking at the impact of all five of the local nonprofit colleges, more than 1,500 of their faculty and staff live in the city.

Powering the workforce

Nonprofit colleges and universities are also helping our economy through their graduates. Corrie has a particularly strong sense of this, given his recent role as Saint Paul’s director of planning and economic development, which he stepped down from late this summer. Along with students coming out of public institutions, private colleges’ graduates help sell the city for business investment, he said, because it translates to having the talent they need. “The number of college students graduating is a powerful number,” Corrie said, “since businesses can be drawn by the quality of the workforce.”

Civic contributions

Another aspect of how private colleges impact the areas where they are includes how students and the institutions are involved in the community. For example, this fall Hamline University is sending 500 first-year students out into Saint Paul to volunteer at about 30 different nonprofit organizations. Or consider the ongoing impact during the school year, when Hamline’s McVay Youth Partnership places 45 student-mentors in the community or how other students are regularly teaching and volunteering in all kinds of ways at nearby Hamline Elementary School.

There’s also the fact that many students from the local area can attend the colleges. In Saint Paul, of the 17,000 students earning bachelor’s degrees at the five private colleges, more than 1,100 of the students are from the city itself, according to data released by the Minnesota Private College Council. It holds true for graduate school too: Of the more than 8,500 graduate students enrolled at four of these institutions in Saint Paul, more than 800 of them live in the city.
“We are not islands unto ourselves — and we can document that,” Corrie said.

For more on the impact of private nonprofit colleges in Saint Paul, read our impact fact sheet.

By John Manning