Higher Education Financial Resilience: Is Data Analytics the Key?

Revenue shortfalls and looming fiscal clouds are causing many colleges and universities to realize that financial resilience partly hinges on having insight into every aspect of the student journey.

The financial instability among institutions has been precipitated by a confluence of issues, including enrollment declines that have not recovered post pandemic, the much-covered demographic cliff, and an increase in potential students questioning the value of higher education. 

I see an opportunity to do better. 

Per the National Center for Educational Statistics, “in 2020, the overall six-year graduation rate for first-time, full-time undergraduate students who began seeking a bachelor’s degree at four-year degree-granting institutions in fall 2014 was 64 percent.” That means that, on average, 36 percent leave their institution without a degree after six years. This is an overall statistic, and while graduation rates are higher at specific types of institutions, they are considerably worse at others!

Retaining and graduating students is one of the more controllable factors impacting revenue. With enrollment declines, it has become all the more important to retain the students you have and make student success an institutional priority if it is not already.

Powerful Analytics Tools Are Only as Good as the Data

Student analytics platforms and solutions have made it easier for institutions to gain insights into one or multiple aspects of the student journey. Many solutions offer artificial intelligence-driven predictive models that can provide significant insights to help institutions establish interventions or take other actions. However, the biggest challenge to using these tools may be the ability to curate the data needed to solve the problem.

Data is often siloed in higher education, which prevents institutions from conducting robust data analysis. Identifying data sources and the gatekeepers of that information is critical to implementing an analytics initiative. Data governance can help break down these barriers and create ongoing cooperative practices. Clean data, with full transparency into its origins, is essential to building trust among institutional stakeholders. Central to this is establishing data as an institutional asset that will be used ethically to deliver the institution’s mission. The Tambellini Group and many solution providers offer professional services to assist with data governance and other requirements to establish a robust analytics initiative at your institution.

Student analytics platforms have almost limitless options for analysis. To jump-start your analytics journey, you might identify and focus your institution’s resources on a single, urgent issue. However, identifying future areas for analysis and action is also crucial so that you select the appropriate student analytics solution that can scale to meet your institution’s longer-term needs. In thinking about a crawl-walk-run approach, choosing a vendor with more applications than you currently need but will likely leverage in the future may save you from having to select an additional solution when the need arises.

Student System Features that Support Outcomes

Enhancing the Student Journey with Natural Language Processing and AI

So, what do student analytics solutions have to offer? Many address all aspects of the student journey, offering insights into recruitment, enrollment, retention, and completion. Several offer sophisticated machine learning or natural language processing capabilities, which allow users to ask questions using everyday language rather than requiring SQL query programming knowledge to get the appropriate data output.

Advanced AI algorithms enable colleges and universities to analyze various scenarios, such as providing predictions that help optimize financial aid to drive tuition revenue or real-time predictive insights into the likelihood of student persistence to maximize yield. These insights can allow institutions to intervene before a student withdraws. And increasing retention can generate significant revenue while enhancing an institution’s standing and reputation.

Preview the Tambellini StarChart™: 2023 Student Systems for Tambellini’s evaluation of student systems that are actively sold in the North American higher education market.

Better Financial Planning with Financial Intelligence

Advanced solutions also can benchmark an institution’s performance against its peers. Evaluating FTE versus expenditures could show where an institution may be overspending or not investing enough. This type of financial intelligence can provide insights into programs that are not sustainable or courses that do not have enough seats available for current enrollment projections. Institutions can see revenue impacts by developing scenarios based on various enrollment yields. Similarly, scenario analysis can provide insights into labor force needs. Higher education is human-resource-centric, so correctly planning for labor force needs is critical to an institution’s bottom line.

Takeaways

While many institutions are feeling financial pressures, perhaps from enrollment shortfalls, investing in data analytics can yield significant results. These results go beyond the revenue generated from increased enrollments and preventing students from withdrawing to enhancing an institution’s reputation and providing students with an improved experience, appropriate interventions, and resources to ensure their success. All these efforts are likely to increase future enrollment and contribute to revenue resilience!

Analytics can provide insight that is otherwise impossible, no matter how well-intentioned an institution’s staff might be. While launching a data analytics program at your institution may seem daunting, many solution providers offer advanced platforms and the expertise to ensure the effort succeeds. The key to building a strong and viable organization is likely among the vast quantities of institutional data you have, but, without action, it is unlikely to be discovered or utilized. The Tambellini Group can provide guidance to identify how your institution can best leverage data analytics and make the proper technology selection. While seemingly counterintuitive, making the correct investments can improve the financial state of your institution.

Watch our on-demand webinar, “The Intersection of Technology and Student Success,” to hear from three institutions at different phases of their student success and analytics journey.

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