The Connecticut Higher Education Supplemental Loan Authority (CHESLA) is a quasi-public entity of the state of Connecticut charged with helping to make college more affordable and attainable for the citizens of the state of Connecticut. Through CHESLA’s In-School loan program, residents can borrow money to attend any public or private non-profit 2-year or 4-year college or university in the United States.
CHESLA recently contracted with CCM Economics to conduct an economic impact study covering the period between 2015 and 2021.
To determine the economic impact of CHESLA’s student loan and scholarship program, CHESLA data was combined with Connecticut specific higher education, income, employment, and tax data to build an economic model.
In the short run, the CHESLA student loan and scholarship program helps to fund university activities and spending. This short run economic impact is large. The program has helped to create 597 jobs, increased wage income in the state by more than $72 million, and increased output by almost $129 million while increasing state Gross Domestic Product by $74 million between 2015 and 2021.
The long run model examined the probable outcomes of students who received a CHESLA student loan or scholarship during this same time frame and projected their future income and taxes paid over the rest of their working lives—from age 18 to 65. Some of the students who received a loan or scholarship will not graduate and their economic impact will be limited. Others will graduate, but leave the state for employment so that their economic impact in Connecticut becomes in effect non-existent. However, a large portion of these students will complete college, and even go on to graduate school, and will remain in the state. These students will earn a combined increase in lifetime incomes of $3.5 billion in net present value terms over a similar sized cohort that graduated from high school only. This will translate into an additional $406 million in net present value of taxes for the state of Connecticut and $837 million in net present value of taxes for the federal government.
In 2015-2021, these CHESLA loans and scholarships were approximately $148 million in size which helped to create a combined short and long run net present value income effect of more than $3.3 billion for Connecticut. This translates into a return of more than $22 for every $1 that was lent or given out via loans and scholarships. There are very few investments where individuals, or society, can make a return of this size.
CHESLA is proud of our efforts to expand access to post-secondary education and enhance the State’s economic development by providing cost-effective education financing programs and informational resources to Connecticut students, alumni, and their families. CHESLA proudly serves as a leading resource for Connecticut students as they plan for their ongoing education by providing financing, information, and tools to help them make informed decisions.