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State Must Improve College Participation and Credential Attainment Rates to Remain Competitive

(Raleigh, N.C.)- North Carolina’s credential gap may cost the state an estimated $3 billion in potential revenue, according to a new report from the Center on Law and Social Policy in partnership with the Center for Higher Education Management. 

The analysis uses data from the U.S. Census Bureau and the National Center for Education Statistics to estimate the number of degreed workers needed to remain globally competitive, relative to need. The United States will need to produce an estimated 24 million additional degrees by 2025 to achieve a 60 percent degree attainment rate among adults ages 25 to 64.  In North Carolina, that number tops more than 637,000 additional degree holders. 

“North Carolina businesses need skilled workers in order to meet the demands of an increasingly competitive global economy,” said Barb Bradley, President & CEO of Action for Children North Carolina, a statewide child policy research and advocacy organization. “Failure to prioritize investments in strategies that ensure a robust pipeline to postsecondary success undermines the future fiscal health of our state.” 

Currently, 37 percent of adults in North Carolina age 25 and older have an associate’s or bachelor’s degree. At these attainment rates, North Carolina is set to produce just 54,000 additional degrees–a significant shortfall from the state’s need. 

This low credential production – compared to the state’s need – results in relatively small increases in average personal earnings and state revenues. Under the state’s current postsecondary patterns, annual personal per capita income in North Carolina is projected to increase by about $170 in 2025, and additional state revenues in income taxes, property taxes, sales taxes and savings in Medicaid and corrections spending will increase by only about $310 million in 2025. 

However, if North Carolina improves postsecondary degree and credential attainment rates enough to meet the 60 percent credential attainment goal by 2025, the state will see revenues increase by more than $3 billion to exceed postsecondary costs by about $1.5 billion in 2025. North Carolina ranks 26th out of the 50 states in the size of the degree gap the state must to fill to meet its credential need. By meeting the 60 percent credential attainment goal, annual per capita income in North Carolina would increase by approximately $1,700 in 2025. 

These new data come days after President Obama’s visit to the Tar Heel state to highlight the importance of strengthening access to affordable postsecondary education. Despite continued high unemployment and a sluggish post-recession recovery, education still generates dividends in North Carolina in the form of lower unemployment, higher wages and improved social and health outcomes. 

“While the data show North Carolinians have been hard-hit by the economic downturn, workers with at least an associate’s or bachelor’s degree have fared better in this challenging economy,” said Bradley.  “Not only are these workers more likely to be employed than less-educated workers, together they earn an average of $11,000 more than workers with only a high school diploma.” 

Although education has long been seen as North Carolina’s brand, the state now stands at a crossroads. Investments in primary and postsecondary education have declined in recent years and remain under continued threat due to budget pressures. According to a recent report from Action for Children North Carolina:

  • Funding to North Carolina’s nationally recognized pre-kindergarten program NC Pre-K, formerly More at Four, was slashed by 20 percent last session, resulting in a reduced number of enrollment slots available to at-risk four-year-olds. The program has been shown to be effective in reducing achievement gaps between economically disadvantaged children and their peers, and has been linked to gains in the state’s high school graduation rate.
  • School districts were asked to make $429 million in discretionary reductions during the 2011-12 school year, leading to fewer support personnel and teachers, larger classrooms, and fewer advanced course offerings at many local schools. School districts now face an additional $500 million in cuts and discretionary reductions during the 2012-13 school year.
  • Support for post-secondary education as a percent of the state economy has reached a 40-year low. Allocations to post-secondary institutions in North Carolina declined by more than $900 million during the FY 2011-13 budget biennium.

“Cuts to primary education weaken the state’s pipeline to postsecondary success,” said Bradley. “North Carolina simply cannot wait another five or ten years to build a strong future for our state economy. We hope recent appeals made by local superintendents at the General Assembly and State Board of Education to fully fund education have not fallen on deaf ears.” 

The Credential Differential: The Public Return to Increasing Postsecondary Credential Attainment, is available on the Center for Law and Social Policy Website at 

Public Investments Matter for Child Well-Being: Smart State Policy Can Change Lives, is available in our publications.

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