Using Student Services to Enhance Outcomes and Reduce Costs

Project Background

Since the end of the Second World War, the U.S. has made tremendous progress in improving college access. In just ten years, between 1999 and 2009, enrollment in degree-granting postsecondary institutions increased by 38 percent, from 14.8 million to 20.4 million. This trend, however, has not driven a commensurate increase in graduation rates, which have consistently hovered around 56 percent. The number of drop-outs in the United States has increased at roughly the same rate as the increase in the number of college graduates. Policymakers, researchers, and practitioners are beginning to take notice. During the past three years, the focus in higher education has shifted markedly from simply improving college access to improving access with success—a trend that has been coined the “completion agenda.”

This agenda comes at a time of equally pervasive attention to the cost of higher education. The great recession of 2010, the “Occupy” movement of 2011, and the passage of new federal regulations holding many colleges and universities more accountable for loan repayment, have all driven the national conversation towards institutional cost containment and the passing of those cost savings on to students in the form of lower tuition.

On both sides of this conversation, there are some who argue that these two agendas are mutually exclusive. How can colleges improve retention and graduation rates while simultaneously reducing costs? Though these two agendas conflict at times, especially at first glance, they do not have to. In fact, by focusing resources on proven solutions to drive student retention and graduation rates, institutions can reduce costs to themselves, their students, and society at large.

In this chapter we argue that student support services, if properly configured, effectively targeted, and delivered early in the student lifecycle, generate savings for institutions, students, and society overall. For purposes of this discussion, “student services” refers to various forms of assistance provided to students outside the context of formal instruction in order to increase their likelihood of success. These services typically include academic advising and tutoring, financial aid counseling, and nonacademic coaching and mentoring. By lowering student acquisition costs, increasing retention and graduation rates, reducing time to completion, and decreasing expenditures on remedial education, student services investments can address many of the primary cost drivers in higher education.

In addition to lowering costs, effective student services can also increase revenues for universities by maximizing the lifetime value of each student, improving operational efficiency and increasing the overall throughput of students. In short, services designed to enhance student outcomes play an important role in our nation’s ability to achieve its educational goals and maintain its global competitive footing.

Throughout this chapter, we draw on our own experience working for a third-party service provider in the student services landscape, InsideTrack. We start with a very brief overview of rising costs and the new completion agenda in higher education, explaining why intelligent investments in student services offer one promising lever with which institutions can improve outcomes while lowering costs. We then discuss five strategies universities should keep in mind to maximize the impact of student service investments. Finally, we close with remarks on obstacles and best practices.

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