How One Community College CFO Models ROI for Student Success Interventions

Community colleges across the country are struggling to improve student outcomes while controlling costs. It’s not easy to assess which student success interventions provide the biggest bang for the buck. I recently sat down with Chris Ruhl, CFO at Ivy Tech Community College, the nation’s largest singly accredited statewide community college system to discuss his approach. Specifically, we discussed his financial impact modeling for the 21st Century Scholars Coaching Initiative, which seeks to close the achievement gap in Indiana by providing executive-style coaching to Pell eligible and first-generation recipients of a state-funded, needs-based scholarship.

The Indiana Commission for Higher Education recently announced results from the first year of the program. These results included an increase in first-year persistence among 21st Century Scholars at the 32 Ivy Tech Community College campuses of 8.8 percentage points, from a historical average of 36.9% to 45.7%.

Walk me through the model’s inception and your approach to modeling the potential return on investment for this initiative.

Ruhl: First, it’s important to note that this initiative was a joint effort between several state institutions, the Commission, USA Funds and InsideTrack. As part of the development of the initiative, InsideTrack had already put together a basic ROI model for the institutions to use in assessing their individual investments in the effort. I was asked to review the model to make sure we were comfortable with the data points and assumptions. I found it to be a good starting point. However, it only accounted for the additional revenue from tuition resulting from improvement in retention. It did not include revenue from other sources, most importantly our unique State funding model. So, I revised it.

What are some of the specific items the model was missing?

Ruhl: The original model included additional tuition and fees, which for us is roughly $1700 per student, per term. However, it did not include revenue from our commission on books and supplies, which adds another $170 per student, per term.

It also didn’t include performance incentives under Indiana’s higher education funding model, which are somewhat complicated, but we were able to include using some basic assumptions.

For example, we assumed that the coaching program would result in retention of 75-80 additional students into their second year (the actual result in year one was slightly more than 100). For every student who completes 15 credit hours, we receive $300 in performance funding. So, that level of improvement adds tens of thousands of dollars to the ROI.

We also receive $4000 for every graduate along with additional incentives (+$3000) for low income graduates and on-time graduates (+$7000 if a two-year degree is completed within two years). Our historic graduation rate is around 20% and our on-time rate add is about 2.5%. Modest improvements to these rates provided through the InsideTrack coaching success adds tens of thousands more to the ROI.

Overall, our assumptions led to the conclusion that the initiative would pay for itself in about three years. Having now seen the first year results, it looks like we’re on track.

In terms of the first-year retention results, InsideTrack really knocked the cover off the ball and we’ve built a strong partnership.

What didn’t you include in the model that might impact ROI?

Ruhl: The two main issues the model doesn’t account for are the variability and timing of state appropriations. For example, while the funding formula says that we should receive $4000 per graduate, we might receive substantially less based on the actual state budget.

There is also a delay in receiving that payment. In 2017, the state will assess how we did in 2013-15 and pay us in 2018-19.

Finally, the formula itself could change based on changes in state politics.

Since these items are largely outside of our control, we decided to leave them out of our modeling and focus on what would happen assuming full funding under the current rules.

We were adequately conservative in modeling the benefits, so I felt comfortable that even with modest results we wouldn’t take a bath, so to speak, paying for what we see as a worthwhile program.

What benefits have you seen so far from the program?

Ruhl: In terms of the first-year retention results, InsideTrack really knocked the cover off the ball and we’ve built a strong partnership. The initiative is essentially on track to break-even from a financial perspective, but beyond that, it’s been good for students and the institution.

As CFO, allocating scarce resources is critical as a public open access institution. Our goal was to ensure this initiative provided a reasonable and realistic ROI factoring in all sources of funding. Additionally, there are so many other benefits that simply don’t fit in a financial model. For example, this program has created an atmosphere and a culture among faculty and staff that is newly invigorated and focused on student success. The ROI model didn’t quantify the momentum from advisors who work with coaches to save another student and then go on to save more.

InsideTrack has also helped us dig into data in a way that we haven’t been able to before and they’re great at helping us understand why students are leaving in the first place and how we can best help them.

Clearly it’s been great for our students, and from an organizational standpoint it sends a strong message that we value outcomes. It has changed attitudes, because staff and faculty see us putting resources behind it and taking it seriously. It’s demonstrated to everyone that even with those populations that face many challenges it is possible to improve results. We can make a difference with the right mix of resources and that’s very empowering and motivating to those on the front-lines.

A final benefit that’s hard to quantify is the ability to provide solid feedback to our partners and state policymakers like USA Funds and the Commission, who helped fund the initiative. Given the data and results, they see that we’re investing their money wisely and driving the outcomes that support their objectives. That level of accountability is rare and I think it will give us an advantage as we pursue funding for similar initiatives in the future.

What’s next in your analysis?

Ruhl: My main question now is how scalable this is.

For example, if we were to apply this to our entire student population, we’re talking tens of millions of dollars in cost, which is a substantial investment. Not all students will benefit from the program in the same way the 21st Century Scholars have, but they also won’t all need the same level of support.

We’re working with InsideTrack to assess how we can provide the right level of support to all students in a cost-effective way.


More about Ivy Tech Community College

Ivy Tech Community College is the state’s largest public postsecondary institution and the nation’s largest singly accredited statewide community college system serving nearly 200,000 students annually. Ivy Tech has campuses throughout Indiana. It serves as the state’s engine of workforce development, offering affordable degree programs and training that are aligned with the needs of its community along with courses and programs that transfer to other colleges and universities in Indiana. It is accredited by the Higher Learning Commission and a member of the North Central Association.

Chris Ruhl, CFO at Ivy Tech Community College

Prior to his career at Ivy Tech, Ruhl most recently served as the Director of the Indiana Office of Management and Budget (OMB). In that role he was the chief state fiscal officer responsible for the articulation, development and execution of the Governor’s fiscal management policies and procedures. Prior to his role as Director of the Indiana OMB, Ruhl served for three years as the Director of the Indiana State Budget Agency. Before that, Ruhl served as Policy Director and General Counsel for the Indiana OMB for two years.

Prior to assuming his responsibilities in the administration, Ruhl practiced in the area of state and local tax law with the law firm of Baker & Daniels LLP in Indianapolis where he assisted multi-national corporations and small businesses in tax planning and representation before state and local taxing authorities.

Ruhl holds a degree in finance from the Broad School of Business at Michigan State University and a law degree from Valparaiso University School of Law, cum laude.

 

Please fill out the form below for access to our webinars.

Related Resources