To determine the cost/benefit relationship between education, incarceration, and welfare, a comparison was undertaken of the actual institutional costs required to produce an associate degree graduate at Miami-Dade Community College (M-DCC), in Florida, and the institutional costs of incarceration and welfare in the state. Costs analyses were conducted for 2,850 students who entered M-DCC in 1986 or later seeking an associate degree and who graduated during 1991-92 having earned at least 60 credits. The actual credits registered were multiplied by the full discipline cost per credit hour to determine the total institutional cost, which was then divided by the number of graduates to give an estimate of the average total institutional cost per graduate. The average time from admission to graduation for the study sample was found to be 4.01 years for Associate in Arts (AA) and 4.34 for Associate in Science (AS) graduates, resulting in average institutional costs of $10,248 per AA graduate and $13,888 per AS graduate. Average annual institutional costs were then calculated at $2,556 per AA graduate and $3,200 per AS graduate. After considering fees and tuition, the average annual costs to the state were determined to be $1,917 for each AA graduate and $2,400 per each AS graduate. The average annual operating cost for a Florida prison inmate was $13,902 in 1990, while the average cost per welfare recipient during 1990-91 was $4,500. Therefore, the average annual cost to the state for producing an AA graduate at M-DCC was 43% of the cost of welfare and 14% the cost of incarceration, while an AS graduate represented 53% of the cost of welfare and 17% of the cost of incarceration. Contains 16 references. (BCY)