Table 1

If we add together the direct expenditures by community colleges, public universities, private colleges, and employers in Michigan, the total spent to address the lack of basic skills is $311 million each year.15 For reasons described above, this figure is likely to be a low estimate.16 It is also considerably lower than other estimates of the national cost to the government of remedial education in public institutions. For example, David Breneman and William Haarlow estimate that the cost to the government of remedial education at public universities and community colleges is around $1 billion nationwide. Ronald Phipps estimates the cost to be around $2 billion.17 Our estimate of the total cost at those institutions in Michigan is $89 million, but we have included all expenditures and not just those paid by the government. If, as we have previously estimated, the government is subsidizing only about one-third of these expenditures, then the cost of remedial education to the government in Michigan public institutions is $28 million. Extrapolating to the entire United States, our estimate of the same costs included in the estimates produced by Breneman, Haarlow, and Phipps would be $773 million nationally.

Based on this comparison of government costs, the calculation of costs produced by Strategy 1 is likely to be conservative. The expenditures by Michigan employers are also likely to be a low estimate for reasons discussed at greater length in the following section. Our lowest reasonable estimate of the cost in Michigan of addressing a lack of basic skills after high school is $311 million per year.