Independent colleges and universities are $29B economic engine for Pennsylvania, per new report

Independent nonprofit universities in Pennsylvania are more than just places of learning — they’re key drivers of local economies, according to a new report. 

Published by the Association of Independent Nonprofit Colleges and Universities of Pennsylvania (AICUP), the report digs into just how much these schools contribute. From jobs and payroll to student spending and research funding, the numbers add up to big impact.

“These schools…do the heavy lifting for Pennsylvania by creating jobs and attracting talent to the state,” said Tom Foley, AICUP’s president and a former PA secretary of labor and industry. “The fact is, the AICUP schools are the lifeblood that keep dozens of towns in Pennsylvania thriving.”

Each year, according to the report, the schools generate $29 billion in economic impact. How? Let’s break it down.

Jump to a section ➡️
• What’s the return on investment from these schools?
• How many students go to AICUP schools?
• How many jobs do AICUP schools support?
• Do these schools contribute to the innovation economy?
• How do AICUP schools help local businesses?
• How was this report created?
• What economic impact do AICUP schools in Pittsburgh have?
• What about Philadelphia schools?

What’s the return on investment from these schools? 

For every dollar spent at an AICUP school, $35 of economic activity is generated in Pennsylvania’s economy, per the report. 

There’s an even greater economic impact when the state invests in these institutions. For every dollar spent by the state on an AICUP school, $158 is returned to Pennsylvania’s economy. The vast majority of state dollars analyzed in the report go to scholarship grants for students from lower-income households. 

Ultimately, AICUP schools generate a combined $1.5 billion in state and local taxes each year. 

How many students go to AICUP schools?

There are more than 80 AICUP in Pennsylvania, and those schools educate a majority of undergraduate and graduate students in the commonwealth. 

A total of 279,000 students attend these institutions every year. And a majority, 55%, of all non-white college students in Pennsylvania end up studying at these schools. 

These schools are also net importers of new talent. 

Pennsylvania is the second top destination in the United States for out-of-state first-year students. Two out of three of those students were recruited to Pennsylvania to attend an AICUP school. 

And when those students graduate, they tend to stick around. More than 77,000 degrees are awarded from AICUP schools annually and around 39,000 graduates stay to work in Pennsylvania each year. 

How many jobs do AICUP schools support? 

Independent nonprofit colleges and universities play a major role in Pennsylvania’s workforce. 

Nearly 200,000 are supported by AICUP schools. 

That means one in every 33 jobs in Pennsylvania is tied to an AICUP college or university. 

Do these schools contribute to the innovation economy?

Absolutely, and they have for decades.

Carnegie Mellon University, an AICUP member, was behind some of the world’s first breakthroughs in AI, wireless technology, and even the invention of the social media hashtag.

AICUP institutions also punch above their weight when it comes to major research recognition.

Today, 58% of all STEM degrees in Pennsylvania come from AICUP schools.

Plus, these schools have earned a combined $1.1 billion in research grants from the National Institutes of Health (NIH) and National Science Foundation (NSF). This places Pennsylvania fourth in the nation for NIH grant funding. 

And that funding has ripple effects. It’s linked to $2.2 billion in economic impact, supports more than 9,500 jobs and generates $82.7 million in local and state tax revenue, per the report. 

How do AICUP schools help local businesses?

AICUP members don’t just educate students, they also help entrepreneurs start and grow businesses. 

Nine out of the 15 Small Business Development Centers in Pennsylvania are located on AICUP campuses. These centers provide one-on-one consulting, market research and other resources to hundreds of small businesses each year.

How was this report created?

Independent researchers from the Parker Strategy Group analyzed financial data from multiple sources, including:

• Surveys of member institutions
• Public data from the US Department of Education
• Annual reports, audited financials and other data published on college websites

They focused on operating budgets, payroll and benefits, and a three-year average of capital spending, all based on data from Fiscal Year 2024.

To analyze this, the team used a widely accepted tool called IMPLAN. It models how money flows through a local economy to capture the ripple effects of spending. For example, when a college pays its employees, they spend money at restaurants, grocery stores, and gas stations. Those businesses then pay their own workers and suppliers. That’s the multiplier effect. 

The report then breaks this down into three layers of economic impact:

• Direct impact: The college’s own spending, like salaries, utilities or construction.
• Indirect impact: Spending by the college’s vendors and suppliers.
• Induced impact: Spending by employees and vendors in the wider economy.

What economic impact do AICUP schools in Pittsburgh have?

AICUP schools in the Pittsburgh metro area are credited with generating more than $5.1 billion in economic impact. That means the average economic impact per school is $393 million for the state. 

Pittsburgh-based AICUP institutions support over 35,000 jobs and provide more than $281 million in state and local tax revenue. 

What about Philadelphia AICUP schools? 

AICUP schools in the Philadelphia metro area generate an estimated $15.2 billion in economic impact. That means each school generates an average $527 million of economic impact. 

Philadelphia’s 29 AICUP universities support over 97,027 jobs and provide more than $749 million in state and local tax revenue.