Benchmarks for efficiency and sustainability: A research study on the cost of delivery

May 2021

With rising tuition costs under scrutiny, colleges are minimizing annual tuition increases while boosting financial aid packages, straining an already fragile business model.

Summary

Higher education is facing a change in demographics, resistance to tuition increases and escalating expenses. This study set out to identify whether there is a common set of core strategies leading to financial sustainability at campuses that belong to the New American Colleges and Universities (NACU), a consortium of more than 20 small to mid-sized independent institutions. The researchers document several examples of NACU institutions that consistently increased their annual return on investment.

Key Insights

Presidents at high-performing campuses exercise centralized, data-driven decision making and vigilant oversight of all financial matters.

They rely on performance-based and data-informed metrics to find ways to increase efficiencies, especially with regard to staffing realignment and cost of instruction.

These presidents are willing to make unpopular decisions, while maintaining full transparency, if data show it will benefit the institution.

High-performing campuses are expanding in high-demand areas—including graduate, non-credit and online programs—and they reward people who work hard for the benefit of the institution.

Methodology

The researchers used IPEDS data from 2008 to 2018 to develop and analyze benchmarking dashboards. They also interviewed leaders at campuses with high return-on-investment ratios.