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Florida passed legislation in 2013 that exempted many students from developmental education, and required colleges to implement new instructional modalities for optional developmental education courses. This paper uses an economic model of remediation to examine how changes in college course taking before and after the reform altered costs to completing introductory college-level courses in math and English for students and institutions, and whether cost savings differ by racial/ethnic subgroup. We also take into account changes in short-term costs relative to course completion rates to examine whether the reform is cost effective overall. We find that the total cost per completer (including costs to both students and institutions) decreased after the reform by $894 in English and $1851 in math. This resulted in efficiency gains of 34% in English and 30% in math. The results from Florida provide promising evidence that statewide developmental education reforms may be an effective mechanism for reducing costs to students and institutions. Reform efforts may also help to reduce racial/ethnic gaps in the costs to gateway completion in both subject areas, which has important implications for equity.

What Happens to Efficiency and Equity? The Cost Implications of Developmental Education Reform