34 Chapter 3: Methodology In addition to the cost of tuition, books, and supplies, Business program students also experienced an opportunity cost of attending college during the analysis year. Opportunity cost is the most difficult component of student costs to estimate. It measures the value of time and earnings foregone by students who attend the program’s classes rather than work. To calculate it, we need to know the difference between the students’ full earning potential and what they actually earn while enrolled in the program. We derive the students’ full earning potential by weighting the average annual earnings levels according to the education level breakdown of the student population at the start of the analysis year.28 However, the earnings levels reflect what average workers earn at the midpoint of their careers, not while attending the college. Because of this, we adjust the earnings levels to the average age of the student population (24) to better reflect their wages at their current age.29 This calculation yields an average full earning potential of $21,825 per student. In determining how much students earn while enrolled in postsecondary education, an important factor to consider is the time that they actually spend on postsecondary education, since this is the only time that they are required to give up a portion of their earnings. We use the students’ CHE production of the Business program’s students as a proxy for time, under the assumption that the more CHEs students earn, the less time they have to work, and, consequently, the greater their foregone earnings. Overall, students attending SUNYWCC’s Business program in FY 2021-22 earned an average of 5.6 CHEs per student, which is approximately equal to 19% of a full academic year.30 We thus include no more than $4,065 (or 19%) of the students’ full earning potential in the opportunity cost calculations. Another factor to consider is the employment status of the SUNY WCC Business program’s students while enrolled in postsecondary education. It is estimated that 77% of students are employed.31 For the remainder of students, we assume that they are either seeking work or planning to seek work once they complete their educational goals. By choosing to enroll, therefore, non-working students give up everything that they can potentially earn during the academic year (i.e., the $4,065). The total value of their foregone earnings thus comes to $1.8 million. Working students are able to maintain all or part of their earnings while enrolled. However, many of them hold jobs that pay less than statistical averages, usually because those are the only jobs they can find that accommodate their course schedule. These jobs tend to be at entry level, such as restaurant servers or cashiers. To account for this, we assume that working students hold jobs that pay 79% of what they would have earned had they chosen to work full-time rather than go to college.32 The remaining 28 SUNY WCC provided the prior level of education for the FY 2021-22 Business program student population. 29 Further discussion on this adjustment appears in Appendix 7. 30 Equal to 5.6 CHEs divided by 30, the assumed number of CHEs in a full-time academic year. 31 SUNY WCC provided data on student employment for non-credit students, and Lightcast provided the estimate of the percentage of employed credit students. 32 The 79% assumption is based on the average hourly wage of jobs commonly held by working students divided by the Westchester County average hourly wage. Occupational wage estimates are published by the Bureau of Labor Statistics (see http://www.bls.gov/oes/current/oes_nat.htm).
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