Does S-STEM Pay? A Return on Investment Analysis

The benefits of the National Science Foundation S-STEM scholarship programs for information technology graduates are well-known. What is new is we ask: What are the measurable benefits for taxpayers who pay the bill? What is the return on investment? Are these good investments? If so, compared to what? The literature gives little attention to these questions. To explore some answers, we undertake a novel investigation that begins with the five-year, $552K S-STEM award we received in 2009 with the goals to recruit, train, and graduate a cohort of 12 talented, underrepresented, Pell Grant eligible scholars primarily from, but not limited to, inner city high schools to major in Computer Science or Information Technology Systems. We base our study additionally on the compounded annual growth rate of the grant award (i.e., the investment) and expected Federal tax receipts from employed graduates (i.e., returns). We use net positive differential or "excess" enrollments above the control prior three-year average enrollment. Finally, we incorporate outplacement, labor, graduation, economic, and administrative overhead statistics. The data suggests that expected returns from the program can outperform historical benchmarks for equities, bonds, and precious metals. Data from the breakeven analysis suggests the results are likely reproducible and furthermore, robust. Thus, we conclude S-STEM pays, as it were, and taxpayers probably do very well from an investment perspective by supporting these programs. It argues to expand S-STEM programs and inform the wider public of the potential benefits.