The more than 200 young people who age out of foster care each year face higher rates of homelessness, incarceration and poverty — and Colorado pays a financial toll that spans decades.
A new study calculates the cost to Colorado’s economy when teens and young adults leave the system never having been adopted or returned to their families.
“They’re all of our children,” said John Farnam, lead author of the report released Tuesday by the Common Sense Institute, a think tank in Greenwood Village. “They belong to all of us. We’re paying for them. We’re unfortunately paying for them on the back end of a failed experience in foster care.”
The lifetime costs for every cohort of 213 foster youth who age out of care — a number based on yearly averages — ranges from $66 million to $73 million, the research found. That’s up to $343,453 per person in individual and taxpayer costs.
The costs are based on the likelihood of those young people spending time in jail, becoming homeless, not completing a high school education and having children at a young age. In Colorado, about 30% of children in foster care graduate from high school.
About 25% of former foster youths in Colorado who were age 21 in 2021 had been incarcerated in the prior two years, according to the National Youth in Transition Database.
The database, which surveys young people who were in foster care, found that, nationally, 26% of teens in foster care gave birth from ages 15-19. And about one-third of foster youth who age out become homeless within three years.
The Colorado study estimated it costs up to $12,200 per person for those who became parents at a young age and up to $131,000 per person for incarceration throughout their lifetimes. It found that former foster youth who don’t graduate from high school would earn $195,000 less per person over their lifetime.
The costs quickly rise to hundreds of millions of dollars when considering that every year, another group of kids ages out of foster care. Each year when 200 or so more kids emancipate, Colorado is hit with another $66 million to $73 million of costs throughout their lifetimes, the study said.
“It was a gut blow,” said Farnam, who is studying child welfare outcomes through a fellowship from the Denver-based Morgridge Family Foundation.
The foundation helped fund a 2017 study that for the first time linked data from the Colorado Department of Education and the state child welfare division, discovering that foster kids were switching schools an average of 3.5 times in four years, and that less than one-third were graduating.
Next, Farnam plans to figure out, through data sharing between the state Department of Labor and the state Department of Human Services, how successful former foster youth are in the job market.
“What industries are they in?” he asked. “Are they earning a family-sustaining wage? Are most kids working in gig economy jobs? Are they working in retail or hospitality?”
The goal is to find out how to better prepare young people before they leave foster care, and the answers lie in education, Farnam said.
Colorado passed a law in 2022 that requires colleges and universities to cover any remaining tuition, after state and federal assistance, for young people who were in foster care at age 13 or older.
“Guess what? That doesn’t matter,” Farnam said. “There are not that many kids who even qualify to use the power behind that legislation because they’re not graduating or completing the GED. Our driving ambition here is going to be getting kids graduated.”
The study, co-authored by the Common Sense Institute’s policy director D.J. Summers, said Colorado should create a “virtual school district” for children in foster care so that education navigators could keep them on track no matter how many times they changed homes and schools.
It also proposes that foster children get a state-funded “education savings account,” which they could use to pay sports fees or buy soccer cleats or other items that would keep them engaged in their schools.
Teens are allowed to leave foster care at age 18, and even 17 in some cases. Under Colorado law, they can stay until 21, though not many young people historically have chosen to stay in the system longer.
In 2021, the state legislature passed a law letting young people change their minds and return to foster care until age 21, even after being on their own for months or years. The law made a provision that was temporary during the coronavirus pandemic permanent in state law.
When state child welfare officials pushed for the law, they said they expected that 58 young people per year would reenter the foster system at a cost of $2 million per year. Last year, 58 people reentered foster care under the law, and so far this year, 39 young people have returned, according to state human services data.
The law also created a grant fund to help counties set up “transition-to-adulthood” programs for foster youth. The programs, called Chafee, link teens who are close to emancipating to case managers, who try to help them find housing, jobs and furniture.
The state has focused in recent years on expanding services for young people transitioning out of the system, including supportive housing and extended case management, said Madlynn Ruble, a state human services spokesperson. The new study, she said, “drives home that investing in these young people early is not only the right thing to do for our youth, but the financially responsible thing to do for Colorado.”
Colorado currently has about 3,600 children in out-of-home foster placements.