From “Churn and Burn” to “Learn and Earn”
Vice President of Business Development, Greenwood Hall
“Look to the right of you. Then look to the left of you. One of you will not be here by the end of the year…” said many college deans during freshman orientation over the years. Today’s retention and graduation statistics remind us of this unfortunate reality in today’s higher education landscape. And while college completion remains a priority among politicians, large foundations (e.g. Gates, Lumina), and local economic development groups who need more trained individuals to fill jobs, students are not the only ones suffering.
Inside Higher Ed’s 2015 Survey of College and University Presidents found that institutions statistically fall into 1 of 3 groups regarding confidence in the sustainability of their institution’s financial model over the next 10 years. Approximately 1/3 of those surveyed agree or strongly agree that their institution has a sustainable financial model. Another 1/3 of presidents were neutral, while the final 1/3 expressed strong concerns that their institution would survive beyond 10 years. Alas, not only are students suffering the effects of poor graduate rates, but many of our great institutions are too.
In December 2015, my company conducted a “first of its kind” study of foregone tuition among Council for Christian Colleges and University (CCCU) member schools. The results revealed a significant impact on revenue. In aggregate, tuition losses for the 115 schools in our study totaled approximately $1.3B annually or about $11.0M per school. We made no attempt to include the cost of recruitment, room, board, fees or the lifetime value of alumni giving.
The solution? Retention is where real revenue is created. And a key factor in retaining students and growing revenue is not simply admitting more students, but in keeping the ones already in your midst. Or, as Neal Raisman says, “It’s time for schools to shift from admissions-concentration to an admissions AND retention focus; from churn and burn to learn and earn.” In this paradigm shift we find the truest definition of student success, where students graduate and institutions sustain their operations and accomplish their mission.