A version of this article originally appeared on LinkedIn through our #100SuccessStories Campaign.
At EAB, my team and I work to help colleges and universities retain and graduate more students. Over a decade of work in this space has helped us develop a unique, business case perspective on one of the most fundamental challenges facing higher ed today.
For years, higher education has known that attrition rates and equity gaps can be dramatically reduced through proven practices such as structured degree pathways, holistic advising and support, and strategic grant aid. Unfortunately, overall progress has been frustratingly slow—largely because many schools believe they can’t afford the necessary new investments to bring these strategies to life on their campuses.
Student retention leads to ROI
$2M
But what if budget was the solution, not the problem? Student retention strategies help more students graduate, but retained students also generate tuition revenue. A few years ago, EAB started encouraging our Student Success Collaborative members to quantify the impact of their initiatives in terms of tuition dollars, not just retention percentages. The reason was straightforward—we wanted to be able to show our members a return on their investment that was beyond just the impact we were having on their students.
As a result, we started to see something that many others have overlooked. Our members helped us amass a wealth of evidence that even the most basic success initiatives can generate a huge financial return while also helping more students stay in school and graduate. For example, Kennesaw State University used our Navigate platform to send a 34-word long “nudge” outreach email to 4,000 unregistered students, netting a 3.4 percentage point improvement in retention and generating $2M in additional revenue.
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Reenrollment campaigns like KSU’s are low-hanging fruit, but we’ve also seen plenty of evidence that institution-wide student success strategies can also pay for themselves. Facing a major enrollment and graduation shortfall following the Great Recession, Wayne State University made a $2M annual investment in student success starting in 2011, increasing to $4M by 2018. The big bet paid off, as WSU estimates that their investment now generates a million-dollar annual surplus from tuition revenue from retained students. On top of that, their graduation rate went up 20 percentage points over this same time.
We see more and more of these student success stories each day. Even big investments like emergency grants and additional advising staff seem to be paying for themselves. Understanding that success pays for itself has huge implications for how to prioritize investments in your students and opens up opportunities that never before seemed possible.
No school knows this better than Georgia State University, where leadership has agreed to reinvest 60% of all incremental revenue generated by student success initiatives directly back into these initiatives in the following year. The resulting virtuous cycle ensures that GSU can make continuous improvement, better serve their students, and push their graduation rate even higher. Their remarkable results speak for themselves. All this begs the simple question that all postsecondary leaders need to be asking: If we know a strategy helps students, and there is a good chance that it more than pays for itself, then then why aren’t we doing it?
Student retention is an even greater priority as enrollment declines
The declining enrollments forecasted for the 2020s are going to reshape higher education. We believe that the urgency to preserve enrollment dollars will put unprecedented pressure on colleges and universities to finally make the investments needed to retain and graduate more students.
Some institutions may feel uncomfortable making this connection between student retention and revenue. This is understandable. For years we have approached student success from the standpoint of engagement and development. Retaining students is just the “right thing to do”—a moral imperative to deliver on the trust that students have invested in their school. It feels intuitively wrong to think about retaining students in terms of the financial contribution they make to their institution, but it is impossible to ignore that improving persistence rates generates much needed revenue that can in turn be used to raise graduation rates even further.
Student success will become more essential for the financial health of your institution, if it isn’t already. Smart schools are already getting ahead of the problem and building out their student success investments. To that end, we have compiled the insight and guidance from hundreds of EAB researchers and in-field practitioners gathered over the last decade into a single report, the Student Success Playbook.
The decade ahead will be a challenging one that requires bold leadership and new thinking. Most colleges and universities recognize that retention efforts are not a wasted investment. Instead they sow the seeds for graduating more students, delivering on the shared objectives of both students and the institutions who serve them.
