Investing in Education for Transition-Age Youth with Experiences of Foster Care: A Cost-Benefit Analysis

Background and Purpose: Literature suggests transition-age youth with experiences of foster care are more likely than their peers to experience disparities across a range of outcomes including education, employment, homelessness, and involvement with the criminal justice system (Courtney et al., 2020). A college degree can improve outcomes by increasing employment possibilities and lifetime earnings; yet students with experiences of foster care experience barriers to postsecondary education, with 3-12% graduating with a college degree (Okpych & Courtney, 2021; Watt et al., 2019). Campus-based support programs are increasingly developing to support students with experiences of foster care in college access, retention, and graduation, yet little is known about the impact of investments in programming, particularly related to societal impact.

Methods: A cost-benefit analysis was conducted to examine impact of an initiative in a southwestern state to improve educational outcomes for students with experiences of foster care through campus-based support programs and pre-college initiatives. Specifically, the analysis considered cost of participation per student across four years of data and financial benefits to individuals and society across four domains: economic gains from increased lifetime employment earnings and cost avoidance of fewer incarcerations, experiences of homelessness, and early parenting. Program and publicly available data were drawn from national and statewide statistics and prior foster care studies; when multiple estimates were available for a given outcome, median data/more conservative estimates were used.

Results: Within four years of program implementation, 1101 students engaged in programming, 150 students graduated with associate’s degrees, and 186 students graduated with bachelor’s degrees (38% of total engaged in college). Of the state’s initial investment, individual costs per student are currently estimated at $20,883 per graduate. Preliminary estimates include increased earnings and tax revenue of $30,888/year for a bachelor’s degree, which returns the state’s investment within 12 years. In addition to increasing economic contributors, a graduating cohort saves the state up to $2.86M annually, if they were involved with the criminal justice system, experienced homelessness, or early parenting at the same rates as the general population in a single year.

Conclusions and Implications: A college degree contributes to long-term individual and societal benefits. Closing gaps in education for students with experiences of foster care reduces societal costs and increases economic gains. The study is limited to four years of data; we anticipate graduates will increase as more students advance and the cost per student will decrease as initial implementation and developmental phases of programming have the highest cost. Conservative estimates suggest the program pays for itself in increased tax revenue in the first 12 years, not accounting for reductions in other societal costs or the financial and overall stability which may be experienced by students with experiences of foster care engaged in higher education. Cost benefit analysis may be a compelling way to create change in organizations, communities, and policies, considering how state and federal investments can support and prevent future economic costs. These findings underscore the value of sustained investment and may guide policymakers seeking cost-effective strategies to support transition-age youth.