New Cost-Return Calculator Helps Institutions Measure Costs and Benefits of Student Retention Programs

January 13, 2010

The Investing in Student Success project, a one-year collaborative between Jobs for the Future and the Delta Project on Postsecondary Costs, Productivity, and Accountability, has developed a new cost-return calculator that campus administrators can use to compare the cost of operating various academic programs with any benefits derived from increased student retention. The calculator includes a series of worksheets that allow institutions to input data on program costs, student performance, and institutional revenue. The data include information collected from the U.S. Department of Education annual surveys and institutional sources. The two collaborating organizations selected 13 higher education institutions (four-year and two-year public and private colleges and universities) to participate in the project and field test the cost-return calculator.

The calculator is particularly focused on "student success" programs-learning communities, first-year experience programs, and other initiatives that are designed to improve undergraduate student retention and degree completion rates. These programs often target low-income, first-generation college students, who typically have lower rates of degree completion than other undergraduates. While these programs have become widespread on many campuses, most institutions do not measure the cost-effectiveness of their student success initiatives.

Among the 13 institutions that participated in this pilot program, the annual direct cost per student participating in the student success programs varied widely-ranging from $59 to $1,601. Data about spending in relation to performance for other programs were not available at most higher education institutions. Seven of the 13 institutions reported increased retention rates of low-income first-generation students that can be directly attributed to their student success programs. Due to lack of data, there is no context for determining this level of cost effectiveness with other campus programs or operations. In addition, other "qualitative" benefits that campuses might derive from their success programs were not measured by the calculator.

Results of the calculator can help inform campus decision making on student success programs and other areas of higher education expenditures. The calculations also have led to "a change in conversation" regarding student success and other initiatives, because they allow institutions to consider many questions regarding program operations and benefits and how these should be measured.

The full report and the cost calculator are available from the Delta Cost Project Web site.