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ROI

ROI

The challenge faced in this project was to look at the return on


investment of the funding put into public schools in Anne Arundel County.
The goal was to try to find how efficiently AACPS is using taxpayers
resources and if changes should be made to increase the return on
investment. At the initial meeting with our mentor, County Councilman Jerry
Walker, this task shifted to a broader look of possibilities of funding as the
idea of a new high school in Crofton. This was introduced for further
investigation.
Before going into any research about AACPS specific aspects, it was essential to research
the basics of ROI and the models associated with it. ROI stands for return on investment. It is a
performance measure used to evaluate the efficiency and profitability of an investment. In
simpler terms, it is the principal that funding or resources put into an investment should make
more than the initial cost and be worthwhile for those involved. There are several factors that go
into calculating any ROI. These factors must be addressed because the returns are not always
clear and can be convoluted with confounding variables. Students see returns by realizing job
opportunities and scholarships are a result of education and programs that are funded. These
students are then able to contribute their skills and help our economy by working high profile
jobs. The return on investment formula is:

The gain from investment is pointing to the proceeds that were gained from selling the
investment of interest. Substantially, the gain from investment should be more than the cost of

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investment for there to be a positive return on investment. A positive return on investment


benefits the person or system that invests and puts money into the service.
There are several factors that go into calculating an ROI. These factors must be addressed
in order to be able to incorporate it into the ROI. The factors are the academic training and
education of students entering the profession, advancing the research on benefits of social work
contributions, and the development of models that include ROI content.

There has been a rapid growth of industries in recent years such as Northrop Grumman
and other companies hiring jobs in the STEM field. According to the graph above, from edu.gov,
there will be significant increases in jobs such as biomedical engineers, medical scientists,
computer systems analysts, and mathematicians. These careers require science, technology,
engineering, or math skills. Between 2008 and 2018, the numbers of STEM jobs are expected to
rise by 17%, while non-STEM occupations grow by a projected 9.8%, the U.S. Department of
Commerce reports. At the same time, individuals who work in STEM fields tends to earn 26%

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higher salaries than their peers in non-STEM professions.(Groux). This data shows that there
will be more jobs available in the STEM field and people who work in that field will most likely
earn higher salaries. Colleges that focus on science, technology, engineering, and mathematics
were the most outstanding this year on Forbes' list of schools with the best ROI. This evidence
suggests that more STEM programs should be made in public schools to ensure that the future
generation in America will be better prepared to go into the new workforce and essentially
support the economy.
Burtless concluded that resource-rich schools produce graduates who earn more than
graduates from schools where resource endowments are meager. He is saying that people earn
higher wages when they graduate from schools with more resources and funding compared to
people who graduate from schools with less resources of teachers and textbooks. This connects
to STEM education because putting more funding into the public school system to make STEM
programs in more high schools will lead to more people earning higher wages.
The government exponentially increased the amount of spending per student in the
United States over the years. It is expected that the increase in investment per student will benefit
the economy. By providing students with more money spent on their education, they will be
more prepared to achieve a higher education and get a beneficial job with a higher wage. Higher
wages essentially represent more taxes that will benefit the government. Some of those taxes go
back into the school system and continue to fund public education.
On September 16, 2010, President Barack Obama declared, "... Leadership tomorrow
depends on how we educate our students todayespecially in science, technology, engineering
and math." He has continuously pushed to implement STEM education in schools throughout the

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U.S. because there are a rapidly increasing number of STEM jobs. There are also many benefits
students can receive from working in these STEM related companies and industries. His goal is
to reverse the nations long decline in science and math. Another intention is to create the next
generation of problem solvers to address the new global and national challenges of the future.
Today, there is a substantial teacher shortage in the STEM field so President Obama has
focused on training more individuals to become educators in that field, such as teachers, so they
can train future students in these fast-growing areas. In September, 2010, he helped create
Change the Equation to improve the quality of STEM education in the country. So far, it has lead
the learning movement for improved teaching, increased STEM education programs in sites
across the country, and created a new blueprint for how companies can create and invest in
STEM programs.
According to John Engler, who is the president of Business Roundtable and a former
governor of Michigan, many students in college are reluctant to pursue a STEM related career. A
recently released study from Change the Equation, an organization that supports STEM
education, states there are 3.6 unemployed workers for every job in the United States. That
compares with only one unemployed STEM worker for two unfilled STEM jobs throughout the
country. According to the unemployment statistics in America, many jobs are available but are
not filled. With such high levels of unemployment, this is astounding. Most of the jobs that are
unfilled need an educational background in science, technology, engineering, and mathematics.
Implementing more STEM programs into high schools in the country would lead to a
greater number of people within the nation who qualify for jobs that require STEM skills.
Students potential in science, technology, engineering, and math can be expanded in the

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experience. The classes in the program would expose more students to the science and
engineering field, and scientists and engineers are what many hiring companies are currently
looking for. If students have more exposure to these classes, more students will pursue a career in
those fields because some of them will find interest in those classes and realize that is what they
want to do with their career.
A likely result from an increased number of STEM programs within the country would be
more students graduating from the public school system in the country with a greater knowledge
and experience in science, technology, engineering, and math. Some of the students who
graduate from a STEM program will be inspired to pursue a career based on their extensive
experience with these topics compared to students who attend school normally. These students
are also more likely to attend and finish college after being in the rigorous program and getting a
taste of what it is like to work in the real world after doing an internship that is required to
graduate the STEM program.
When examined as a region the return on investment of the county public school
systems is approximately 92%(BEACON). This return on investment is a positive outcome
when money is spent on public schools. The economic impact of the public school systems
shows itself through two ways. Those ways are the annual impact from operations of the school
systems and the impact achieved by the percentage of employees payrolls spent locally.
Numerous national studies have studied the societal and economic benefits of Pre-K12
education beyond the immediate educational outcomes for students. There are 3 different types
of benefits that can be classified as obvious, not so obvious, and intangible benefits.
Obvious Benefits

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These benefits are straight forward and recognizable. Preparing a trained workforce and
improved quality of life results through higher earning potential for people with a good
education. Many well-educated people who get a job and contribute to the economy are part of
the benefits due by PreK-12 education that is publicly provided by the government. Sadly, these
benefits are very hard to quantify, even though they seem clear to clarify. After graduating school
and getting a job, the payoffs tend to be many years beyond the end of the public school system.
The measurements of people with higher earning potential based on their amount of education
are not one hundred percent precise. These benefits seem simple to calculate because of the
cause and effect of public spending on education to ROI. It is actually mathematically difficult to
calculate the ROI of so many students and people as they progress with their lives.
Not So Obvious Benefits
These benefits are often overlooked by public policy decision makers and people from
the public. Those public policy decision makers make policies depending on their view of what
the people in the state need and all necessary amenities. They generally see government funded
public education as a primary cost item that uses up much of the state and local budgets. The
benefits are acquired from public spending in the local economy through the employment of
people such as teachers associated in the public education field. The benefits are also attained
from numerous employment and economic factors. A positive return on investment (ROI) is the
result from these benefits, proving that the money from taxpayers invested in public education
has contributed to the economy.
Intangible Benefits

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These benefits affect the quality of life of people in a society. These benefits directly
affect the quality of publicly provided education. They also affect the community and have the
ability to attract or repel families with professional workers who have jobs, generate money, and
contribute to taxes. These benefits are not clearly pointed out and calculated.
All three types of these benefits show how much the society, economy, and government
depends on public education for prosperity. To maintain the prosperity of this country, many
people need to have the education needed to be successful in getting a job in this internationally
competitive workforce. There is a greater demand for STEM related jobs than ever before so to
continue generating a high positive ROI on education, more STEM programs should be
implemented into schools.
To calculate the ROI of a STEM high school, the investment and the benefits from that
school will need to be considered. The money invested in paying teachers in the STEM program
and the money that goes to funding STEM students field trips and technology will also need to
be included. Benefits include the number of people who graduate from that program and go on to
college and get a job. Their salary amount will be used to calculate the benefit of that high
school. The Minnesota IMPLAN Group has made a Social Accounting Matrix for each county
that calculates the benefits from public education. It estimates the employment and economic
impacts of providing people with public education. Its Social Accounting Matrix calculates the
ROI of a county, so it can be also used as a model to calculate the ROI of a STEM high school
on a smaller scale.

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Fortunately, there are many opportunities for higher education and well paying jobs for
students in STEM professions. There are countless scholarships available to STEM students,
including but not limited to; Gilman Scholarships, Siemens Foundation, Smart Scholarship,
NASA MUST Scholarship Program, American Society of Civil Engineers Scholarships, and
American Society of Safety Engineers Scholarships. These scholarships allow for the
students to have less debt after going through college and start profiting from their jobs
earlier than their peers. The extra money could also be used to fund going into higher
education to get higher degrees and be able to get into higher paying jobs. The jobs that
STEM students go into pay more than other types of jobs. Students going STEM professions
on average earn on average 26% more money than those going into non-STEM jobs. What
also helps is the amount of STEM jobs is on the rise, estimated to go up by 17% in 2018
from the amount in 2008. The trend towards technological advancements and reliance on
computers means that STEM jobs will always be in demand. The amount of students though
interested in STEM subjects is not high at all.

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Only 31% of high school seniors are STEM interested in the first place, and only 17% of seniors
are interested in STEM and math proficient. These numbers are staggeringly low. In a class of
25, only 8 students in that class would be STEM interested and only 4 of those students would
also be math proficient. Or about 85 students out of a graduating class of 500. That is a very low
number of people to enter college interested in STEM.
That lack of interest is reflected when looking at the top ten most popular majors of 2013;
there isnt that much in the way of STEM. The list is:
1. Business Administration
2. Psychology
3. Elementary Education
4. Nursing
5. Biology
6. Education
7. English
8. Political Science
9. Economics
10. Marketing
Compare that to the top ten majors most likely to get you a job.
1. Biomedical Engineering
2. Biometrics
3. Forensic Science
4. Computer Game Design
5. Cybersecurity
6. Data Science
7. Business Analytics
8. Petroleum Engineering
9. Public Health
10. Robotics
Of the ten popular majors, only biology and nursing are highly related to STEM. All of the ten
that will get you a job are STEM related. Also, of those majors that will get you a job, many of
them require engineering and/or programming skills, while none of the popular majors are even

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remotely related to engineering or programming. What this creates for STEM students is the
opportunity to get a major for a job that is hiring and paying well without nearly as much job
competition as their non-STEM peers will be facing.
Now, there are clearly opportunities for STEM students, but they need to be prepared to
take advantage of these opportunities. In order to get into college and learn these skills, they will
need not only to be ready for college, but have enough background knowledge to understand the
courses. STEM high schools are proven to be able to prepare their students for just those things.
Thomas Jefferson High School is ranked as the #2 STEM high school in the country and the #4
overall high school. They have a College Readiness Index of 100.0, the highest possible, and
have very high test participation and scores. These students are very well educated and well
prepared for college, allowing their students to earn those STEM majors that will get them
employed and, more importantly, get these students an understanding and an interest in STEM
professions and subjects.
Now it is clear that STEM high schools are helpful, but will it have a good ROI? As
stated earlier, ROI is used to determine basically if making an investment will be worth it
financially in the long run. The short answer to this question is yes. On Forbes' list of schools
with the best ROI, STEM schools take 5 of the top 10, including both the number 1 and number
2 spots. Those number 1 and 2 schools are California's Harvey Mudd College and Caltech
respectively. Both of these schools have a 30 year ROI of over two million dollars, and after
graduating, students can expect starting salaries of over 65 thousand dollars. STEM schools are
very profitable, and there is no reason to believe a STEM high school could not be successful as
well if constricted in Anne Arundel County.

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However, it will only work if this high school can get the students educated and
interested about STEM. Specialized schools or programs designed to teach STEM in interesting
ways is the best way to create success that leads to a good ROI for the school. That is why
Thomas Jefferson High School is so successful. They are a specialized school specifically for
STEM, and as a result, they prepared their students well for college, taught them many STEM
skills, and those students will actually pursue those STEM fields that Thomas Jefferson High has
taught them and got them interested in. Thomas Jefferson, as a result, is now the number 4 high
school in the country, which gives it a lot of recognition and, more importantly, funding.
If a new STEM high school in the Anne Arundel County school system can also provide
the necessary education and create that kind of environment where the students are interested in
what they are learning, then that school could become very profitable and may even become one
of the best high schools in the country if it is successful. Even if this high school doesnt reach
Thomas Jefferson High School levels of national ranking, the ROI will still be great and the
benefits will still be there for this school and the students will still get the STEM education that
this new high school will be trying to give them.
The most important thing about raising the number of STEM graduates is to remember
that their job competition is not only coming from the United States. When it comes to STEM

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graduates, the United States is very behind.

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If the United States doesnt try to increase our levels of education in STEM fields, well
continue to fall behind until the United States is eventually left behind. China is nearly at 50%.
With the Chinese population at around 1 billion, that creates a lot of competition, and that is only
from one country. If the United States wants to continue to be a world power, they will need to
adapt to be ready for the future, and the future is STEM professions in a technology dominated
world.

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AACPS has started implementing magnet programs that focus on


specific career paths. There are exclusive programs that require interviews
and applications and are geared towards STEM fields and then there are
general programs that are open to anyone eligible such as PLTW and
vocational schools such as CAT South. These programs are designed to give
students an early start in the careers that they are interested in pursuing.
Often times, they are able to save large amounts of money by completing AP
level courses that count as college credits. This is a large factor in ROI and
we are seeing that these programs are worth it if the trend of this job
marketplace continues. From firsthand experience in the STEM program, it is
evident that classes that require as much funding as normal classes are
successful in advancing students who are driven to get the grunt work of
their potential college courses done and have experience that would

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normally happen at a later stage.

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In these figures collected in surveys from scientists and graduate


students, we can see that it is important to provide programs not only to
high school students, but also elementary and middle school students to get
them interested in general science. It is also evident that more complex
subjects such as physics and chemistry should be saved for high school as
we already have in the current curriculum.
Project Lead the Way or PLTW is a program similar to STEM in that it is
based in the same fields but PLTW is a more all-encompassing program that
has courses focusing in engineering, computer science, biomedical science,
and programs for children in elementary and middle schools. This program is
much more open than STEM, which has a set curriculum that a student has
to be involved in from the time they are a freshman to be able to continue
the

courses. Instead of having this exclusivity, PLTW allows students to take the

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introductory classes at any point of their high school career and continue on
to more challenging and meaningful courses.
Another program that has been implemented across the world is the
International Baccalaureate program. This is available in a select number of
schools in Anne Arundel County. IB offers four educational programs for kids
in elementary school through high school. This program is not like STEM or
PLTW because it encompasses all aspects of the students education while
they are involved. It covers most subjects and you do not take other courses
while you are in the program. The goal of the program is to develop
intellectuals to help create a more peaceful world. As far as the return on
investment of the IB program, it offers a very rigorous preparation for college
courses and in some cases colleges will accept some credit hours earned
through the IB program. This program is vastly different than the STEM
focused programs we have but it can be just as beneficial for the education
of our students. This option would not be one of our top recommendations
because it is already fairly open to many people in the county, whereas
programs like STEM have had to resort to lotteries for students to get in.
Most of the return on investment is going to come from the
opportunities that present themselves as a result of participating in these
specialized programs. Our county should be striving to make these programs
accessible to anyone who wants to participate and shows initiative. STEM,
PLTW, IB, and CAT all apply to different career paths and cover most of what

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one could wish to branch into before heading to college or the workforce. To
keep a positive ROI, it is essential that we expand the programs that are
providing the most scholarships, credit hours, and outside opportunities. We
also need to take the programs that are not doing all of these things and
experiment with different methods that have been proven to work.
Making the case for Crofton High School to be built is the last option we
looked at that could improve the ROI of funding put into our school system. A
new high school has previously been brought up because students from
Crofton are split between South River High School and Arundel High School,
which are both close to full capacity. Arundel is at 97% capacity and South
River is at 106%. It would be wise to start planning and saving money so that
a high school can be built to relieve the pressure on the overpopulation in
both of these schools in a smooth manner before it starts to damage
students quality of education. This issue is not new, a Crofton High School
has been proposed as early as 1968 and a new high school has not been
opened since 1982 in our county.

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There are already groups lobbying for Crofton High School to be


constructed. This group has formed the Build Crofton High School
Campaign and has testified at three county council meetings this year. This
group has also sent in letters, had a signed petition with 2000 signatures,
and held meetings at places like the local library. The goal is to get the new
high school put on the upcoming county budget. Another group that has
shown interest is a group of 150 parents from Crofton that attended the
board of education meeting this past September to talk about the possibility.

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Obviously, the largest hurdle is getting the money required to build a


new school. Average costs for building a high school are about 30 million and
this money comes from sales, income, and property tax. AACPS owns about
150 acres by Crofton Middle School and the middle school only takes up a
fifth of this land. This significantly decreases the costs involved in building
the school and can allow for a higher ROI to be reached quicker.
The proposal decided upon if funding would be more beneficial to
students in specialized programs, a new high school, or solidification of
current policies. Specialized programs offer factors that contribute to a
positive ROI such as scholarships, possible credits to decrease college costs,
early internships and job opportunities, and specific skills for future careers.
A new high school in Crofton provides ROI factors such as a decrease in
funding for current or future programs, brand new infrastructure and facilities
for potential students, and alleviation of overpopulation in current schools.
From extensive research, the final proposal is that the ROI that magnet
programs are providing is much greater than building a new school would
provide. Although the populations in both schools are growing, the ROI of the
new high school would not be realized for many years because the students
in Crofton that would be able to go there are already provided an education.
As of now, the students are not missing out on anything in terms of a quality
education that they could potentially get at a new school. Schools are a large
undertaking and they require advanced planning, but now we are at a point

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where students will benefit more from advanced and specialized programs to
lead them on a fast track to their desired careers. With this in mind, it would
be wise to start allocating portions of funding to Crofton because the
population is constantly growing. This prevents a situation where the
overcrowding would start to affect the quality of education of our students. In
this situation we can think of implementing more specialized products as a
very viable solution whose ROI would be almost immediate and would
continue as long as it is viable and relevant to the time. The new high school
is a longer term solution that will not necessarily make the money put in, but
will solve a problem that is bound to arise. Newer programs could even be
implemented at Crofton High School and eventually incorporate all of the
elements we have seen that have provided some time of return for our
county.
The convenient part of the solution and our findings is that there is
room to focus on both programs and the new high school. Most new
programs, whether it is from STEM, PLTW, or something else, are only going
to cost what a normal class would cost in a high school. The infrastructure
and technology are already available for use and many grants are being
given and companies are willing to provide software to educate students. So
while our group believes that funding should continue to flow into specialized
programs, it is still very possible to start planning to build Crofton High
School.

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Citations:
About Change the Equation. (2013). Retrieved from http://changetheequation.org/
Burtless, G. (1996). Does Money Matter? The Effect of School Resources on Student
Achievement. Retrieved from http://books.google.com/books?
hl=en&lr=&id=N3UIwF9P1WUC&oi=fnd&pg=PA1&dq=economic+study+impact+schools&ot
s=SUHvNAkimb&sig=oyazgOE4HdpsNg8I7ATQVXmMv6o#v=onepage&q=economic
%20study%20impact%20schools&f=false
BEACON at Salisbury University. (November 30, 2011). Economic Impact Analysis of the
Publicly Funded Pre-K-12 Education on the Eastern Shore of Maryland. Retrieved from
http://www.ccgov.org/cmup/ws/ESMEC%20Economic%20Impact%20Study%20FINAL.pdf
Groux, C. (2013, June 11). Stem schools bring students return on investment. Retrieved from
http://www.usnewsuniversitydirectory.com/articles/stem-schools-bring-students-best-return-oninvestm_13198.aspx
Khazan, O. (2012, January 6). Lack of interest and aptitude keeps students
out of STEM majors. Retrieved from
http://www.washingtonpost.com/blogs/on-small-business/post/lack-ofinterest-and-aptitude-keeps-students-out-of-stemmajors/2012/01/06/gIQAoDzRfP_blog.html

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Larson, P. (2012, July 18). President Obama announces new plan to create stem master teaching
corps. Retrieved from http://www.whitehouse.gov/blog/2012/07/18/president-obama-announcesnew-plan-create-stem-master-teaching-corps
Office of the Press Secretary. (2009, November 29). President Obama launches "educate to
innovate" campaign for excellence in science, technology, engineering & math (stem) education.
Retrieved from http://www.whitehouse.gov/the-press-office/president-obamalaunches-educate-innovate-campaign-excellence-science-technology-en
Gandel, C. (September 10, 2013). Discover 11 Hot College Majors That Lead
to Jobs. Retrieved from http://www.usnews.com/education/bestcolleges/articles/2013/09/10/discover-11-hot-college-majors-that-lead-to-jobs
Scholarship Opportunities for STEM Students. (n.d.). Retrieved from
http://www.isep.org/students/featured_programs/stem/stem3.asp
Scott, L. (June 12, 2013). What are the most popular college majors?.
Retrieved from http://www.wlky.com/news/local-news/education/What-arethe-most-popular-college-majors/-/9365950/71304/-/14xddy3z/-/index.html
Stevens, K. (December 17, 2011). STEM Education Matters: Resources, Stats
and Infographics. Retrieved from
http://www.lessoncast.com/2011/12/17/why-stem-education-mattersresources-and-statistics/

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Thomas Jefferson High School for Science and Technology. Retrieved from
http://www.usnews.com/education/best-high-schools/virginia/districts/fairfaxcounty-public-schools/thomas-jefferson-high-school-for-science-andtechnology-20461

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