Black Colleges Matter: Debunking the Myth of the Demise of HBCUs

Historically black colleges and universities have a surprisingly large economic impact.

Over the 13 years that I have been the CEO of UNCF, I've discovered that everyone knows our motto, "A mind is a terrible thing to waste"® and tens of thousands of students know that UNCF is the nation's biggest provider of minority scholarships. Less well known—and much less understood—is the work we have done for nearly 75 years to champion the nation's 100 historically black colleges and universities (HBCUs).

Over the course of my own education and career, I have seen HBCUs produce outsized results for first-generation, low-income students of color, and do so with no-frills budgets. The first college graduates in my family attended Fisk University in Nashville over a century ago. I attended Atlanta's Morehouse College, taught at neighboring Spelman and was president of Dillard University in New Orleans. I have seen first-hand that HBCUs produce outsized results for first-generation, low-income students of color, and do so with no-frills budgets. Yet I frequently hear from critics outside the HBCU community that HBCUs are no longer "relevant." Ever since higher education began integrating a half-century ago, and black students started flocking to predominantly white colleges and universities, HBCUs have become vestiges of a segregated past--or so the argument goes.

What's surprising about this perennial debate is that virtually no researchers have sought to comprehensively assess the modern-day economic impact of HBCUs. To fill that information void, UNCF commissioned a first-of-its-kind study by the Selig Center for Economic Growth at the University of Georgia. The new study uses actual spending data from each of the nation's 100 HBCUs to project the collective and individual economic impact of HBCUs on the nation, and for the first time quantifies the lifetime earnings of the 2014 class of HBCU graduates.

The results of that rigorous study, released Nov. 14, belie the conventional wisdom about HBCUs. Its overarching conclusion is that HBCUs have an unexpectedly large economic impact, both nationally and regionally. Not only are HBCUs relevant in 2017, it turns out that they are necessary for regional economic growth, especially in the South, where most HBCUs are clustered.

The Selig Center study found that the total economic impact on output of HBCUs, the most inclusive measure of economic impact, is $14.8 billion annually. In layman's terms, the economic impact of HBCU spending generates just over 134,000 jobs each year in their regional economies, with almost 60 percent of jobs created off-campus and just over 40 percent created on-campus. By way of comparison, the 134,000 jobs that HBCUs help generate annually exceeds the number of jobs at Oracle, one of the nation's 50 largest private employers.

It is noteworthy that HBCUs are having a big economic impact despite the fact that they are a comparatively small sector of higher education. Some 2.8 million people earned undergraduate degrees in the U.S. in 2014, with over 40,000 undergraduate degrees coming from HBCUs (another 10,000 HBCU graduates that year earned masters, doctoral, or professional degrees). Not surprisingly, HBCUs account for a larger share of African American graduates than their numbers would suggest, enrolling 10 percent of African American undergraduates nationwide. And HBCUs continue, as in the past, to produce a disproportionate number of baccalaureate degrees among African American students, accounting for 17 percent of bachelor's degrees and nearly 25 percent of African American degrees in the STEM fields—science, technology, engineering and math.

Still, the Selig Center study raises an obvious question—what accounts for the unexpectedly large economic impact of HBCUs given their comparatively modest share of the higher education sector? Two answers to that question help explain why HBCUs continue to be relevant in 2017.

First, HBCU spending has an important "multiplier effect" on local economies in the South. Alabama has 15 HBCUs, North Carolina has 10 and Georgia and Texas each are home to nine HBCUs. And second, contrary to the prevailing wisdom, HBCUs are more effective at getting low-income minority students to graduation day and into the labor force than their comparable peers in higher education.

The Selig Center analysis found that every dollar in initial spending by HBCUs generated an additional 44 cents on average for the regional economy, a multiplier ratio of 1.44. Spending by each HBCU created a kind of virtuous cycle: More students earned their degrees as a result, which created a multiplier effect in regional economies, amplifying the value of HBCU spending.

For example, the study projected that each HBCU graduate who goes on to work full-time could expect to earn an additional $926,700, on average, over the course of their careers than what they would have earned without a degree or certificate. The graduates' higher incomes in turn generated more tax dollars to support better schools, roads and recreational facilities in the region. College graduates are also more likely to contribute to their communities through volunteering, voting, blood donations and serving in local political office, like running for the school board. And they are less likely to drain public resources—i.e., less likely to be out of work, need welfare benefits or be incarcerated.

Moreover, many HBCUs are located in regions where economic growth has lagged, making their economic contributions to their communities all the more essential. In Georgia, every dollar in initial spending by the state's nine HBCUs generates $1.56 in initial and successive spending in the state. All told, Georgia's HBCUs annually generate roughly 12,000 jobs in local and regional economies.

The second reason that HBCUs create an oversized economic impact is that they do a better job of graduating low-income, first-generation students than their peer institutions, even though they are far more likely than non-HBCUs to have freshmen classes where three-quarters or more of students come from low-income backgrounds.

A 2017 report from the Education Trust found that once low-income demographics of the freshman class are taken into account, four-year HBCUs on average graduate 38 percent of their black students in six years, compared to 32 percent for non-HBCUs, who typically have bigger endowments and more resources than HBCUs. If we could replicate nationally raising the graduation rate six percentage points for black students, tens of thousands of additional students would earn their degrees, broadening opportunities throughout their lifetimes.

What's the secret of HBCU success? For more than a century, HBCUs have led the way in developing and polishing the practices necessary to get underprepared, first-generation students ready for the challenge of college work. From the moment that students set foot on campus, many HBCUs carefully monitor their progress, from the president and faculty on down to counselors and support staff. Most HBCUs track whether students are showing up for classes, whether students are falling behind in their studies and whether students are making use of tutoring and support services.

It is common for staff and faculty to become almost like a "second family" to many students, providing the personalized support that students of color and first-generation students often fail to find at predominantly white institutions.

Morgan State University President David Wilson describes the HBCU ethos as "intrusive intervention," coupled with care and support—a campus climate that many high-performing urban charter schools have sought to mimic in recent years. To those familiar with the culture of HBCU campuses, it is no surprise that a 2015 Gallup survey found that "Black HBCU graduates are more likely to be thriving in purpose and financial well-being than black graduates who did not receive their degrees from HBCUs."

For many black and Latino students today, HBCUs foster a sense of safety and belonging for students of color who feel threatened by growing racial tensions. While enrollment and applications are down at public and private colleges and universities, HBCUs have seen big jumps in enrollment during the last two years.

At Virginia State University, enrollment is up nearly 50 percent in two years. Spelman College's applications jumped from a little over 5,000 two years ago to 8,000 today. HBCUs that have seen double-digit increases in freshman enrollment include Tuskegee (up 39 percent), Shaw University (49 percent) and South Carolina State (32 percent). Clearly, rumors of the demise of HBCUs are not just greatly exaggerated but false.

Despite their economic and communal benefits, HBCUs have been chronically under-resourced. It is well-documented that numerous states in the South underfund HBCUs, and HBCUs have small endowments compared to their peer institutions—HBCU graduates often leave college with steep debts and few assets to donate in alumni fundraising drives.

Former U.S. Secretary of Education Arne Duncan echoed the observation about HBCUs that "no other institution of higher learning has had to do so much, for so many, with so little." The Selig Center's groundbreaking study of HBCUs' economic impact should help put to rest the question of whether HBCUs remain relevant today and build the case for boosting government and philanthropic support for HBCUs.

HBCUs are deeply woven into their communities throughout the United States, particularly in the South. It makes no more sense in 2017 to question the "relevance" of HBCUs than to question the relevance, say, of the black church—or any other institution that not only creates jobs but prepares low-income students to contribute to the country's greater good.


Michael Lomax is the president and CEO of UNCF. To learn more about this landmark study and the impact of nearly all of America's HBCUs, please click here: UNCF.org/HBCUsMakeAmericaStrong