Early colleges (ECs) provide high school students access to college coursework with the goal of increasing postsecondary opportunities for traditionally underrepresented students. We examine the impact of ECs on postsecondary attainment, calculate the resulting monetary benefits, and then estimate the per-student costs of ECs compared with traditional high schools to assess costs and benefits. Our findings indicate that students enrolling in ECs in our study are more likely to attend college and graduate with an associate's or bachelor's degree. Increased educational attainment from EC enrollment results in lifetime benefits of almost $58,000 per student. ECs cost approximately $950 more than traditional high schools per student per year, resulting in an overall cost of $3,800 more per student across four years of high school. Comparing benefits to cost, we estimate a net present value (NPV) of $54,000 per student and a benefit–cost ratio of 15.1. Even when using conservative estimates of costs (upper bound) and benefits (lower bound), we calculate an NPV of over $27,000 and a benefit–cost ratio of 4.6. These results indicate that investment in ECs pays off through increased earnings for EC students, increased tax revenue, and decreased government spending.

Federal and state governments in the United States make extensive use of student poverty rates in compensatory aid programs like Title I. Unfortunately, the measures of student poverty that drive funding allocations under such programs are biased because they fail to reflect geographic differences in the cost of living. In this study, we construct alternative poverty income thresholds based on regional differences in the wage level for low-skilled workers. We then examine the distribution of Title I revenues after adjusting poverty rates for geographic differences in the cost of living and adjusting Title I revenues for geographic differences in the purchasing power of school districts. Our findings turn conventional wisdom on its head. We find that when we fully adjust for regional differences, Title I funding patterns disproportionately favor rural school districts in low cost-of-living states. We conclude with policy recommendations for revising Title I funding formulas.