This study examines the effect of the public higher education sector on Virginia’s economy. The study consists of three distinct parts. The first part consists of a full accounting of the current flow of economic activity in Virginia that can be directly tied to the expenditures and activities of publicly supported institutions of higher education. The second part is a forecast of the additional economic impact of a policy initiative to increase the number of undergraduate and graduate degrees by Virginia public institutions by 70,000 over the period 2010 to 2020. The third part is an evaluation of a broader set of economic and social benefits generated by the public higher education sector, including enhancements to graduates’ life circumstances such as improved health, community benefits such as reduced crime, and economic benefits that stem from industrial attraction, entrepreneurial activity, innovation, and workforce development.