In an earlier post The Jenius mentioned The Kalamazoo Promise and how it can serve as an economic engine. But to make it work, the matter boils down to one question: how much money is needed?
If We estimate that 1,000 students are going to be graduating from public high schools every year, and that the average yearly tuition and fees for each student in a state university or community college will be $7,500, to keep such a Promise will require $7.5 million a year.
Both estimates are on the high side, for in a population of roughly 80,000 residents (Kalamazoo), the average number of high school students is roughly 475 (estimated from this FactFinder source on age and population) and the average annual 4-year college tuition is hovering around $5,500. So in actuality, We are talking about an amount of money closer to $2.7 million than $7.5 million.
Why the gross overestimation? To show that even with numbers that nearly triple a close estimate, The Kalamazoo Promise can be implemented here in Puerto Rico.
It would take creating a fund of about $45 million with an average yearly return of 10%. At present rates, funds of this size can return anywhere from 7% to upwards of 20%, depending on how the monies are used. Obviously, the Promise Fund monies cannot be reduced beyond what's needed to pay the current year's tuition and fees, but as the student population rises and inflation swells college costs, the Fund must stay ahead of that growth curve.
The way the Kalamazoo Promise is set up now, no student will receive monies until at least two years have passed, and more likely four. At that rate, a 10% interest (compounded) could add about $20 million in four years. With over $60 million on hand to build interest with, the Fund could easily provide the necessary monies for double the initial number of estimated students and grow as the number of students grows over the years.
And how difficult is it to create a $45 million Promise Fund in Puerto Rico? The difficulty lies not in accessing the money, for Puerto Rico has billions of dollars still deposited in so-called "936 accounts." In addition, the local economy could generate $45 million for a Promise Fund in days, if not hours, simply from major industries and retail companies.
No, money is not the problem. It seldom is. The problem lies in finding the will to do it and agreeing on how it will be done. Forget the government: waiting for them to do this would be like asking a cockroach to compose a symphony. Private industry could do it, but even with the best of intentions and efforts it would not come together for years--maybe more than a decade. By that time, We would be further down the list of "Attractive Places In Which To Invest For The Future."
Our best chance for a Promise Fund comes from private organizations and individuals. In fact, it is Our only chance. It's amazing how often that turns out to be the true path to progress and how often We seem to ignore it.
The Jenius Has Spoken.