As higher education continues to grapple with financial pressures, the conversation often focuses on enrollment, revenue, and spending. But one critical element of understanding the movement toward financial sustainability is often missing from the conversation: the cost to produce institutional outcomes. The latest rpk GROUP report, The Financial Sustainability of Higher Education: Bright Spots & Challenges 2012 to 2022, highlights how institutions are improving two key outcomes: degree productivity and efficiency.
Colleges and universities need to move toward financial sustainability so that they can invest in the people, programs, and services that support student success. The good news? The data shows higher education is making meaningful progress in producing more degrees and certificates—and producing them more efficiently—despite ongoing financial pressures.
Critical Measures of Institutional Outcomes: Degree and Certificate Productivity & Efficiency
The significance of these institutional outcomes can be assessed in part through two lenses:
- Degree and certificate productivity: How effectively are institutions converting students into degree and certificate holders?
- Degree and certificate efficiency: How well are institutions using resources to support student success?
Over the past decade, public institutions in particular have made significant strides in both areas. Even as enrollments have declined, degree production has increased. This means institutions are becoming more effective in guiding students toward completion.
Degree Productivity
One of the report’s most compelling findings is that higher education institutions are awarding more degrees and certificates per full-time equivalent (FTE) student than they were a decade ago. Public institutions, in particular, have seen notable improvements.
To the extent that institutions are focusing more on retaining the students they have and supporting them in getting to completion, these increases have the added advantage of contributing to financial sustainability through additional net revenue generation.
Degree Efficiency
Beyond producing more degrees, institutions are also working to lower the cost of producing each credential. By streamlining academic offerings, optimizing faculty and staff resources, and leveraging technology, many colleges and universities are driving down the cost per completion.
Based on the data analyzed in the report, all public institutions have improved their degree and certificate efficiency over time, and they have demonstrated an ability to achieve those outcomes under various financial circumstances over the past decade.
What This Means for Financial Sustainability
Higher education’s financial future depends not just on managing revenues and expenses, but also on ensuring that investments in instruction and student services lead to successful student outcomes. The latest rpk GROUP report makes it clear: institutions that prioritize completion and efficiency will be better equipped to navigate the financial challenges ahead.
Want to dive deeper? Download the full rpk GROUP report here. And register for our upcoming webinar on Thursday, April 3rd at 1pm ET (register here).
During the webinar, rpk’s Rick Staisloff and Donna Desrochers will share key findings from the report. Later, they will engage in conversation with industry leaders, Terry Brown, Vice President for Academic Innovation and Transformation at American Association of State Colleges and Universities, and Ed Smith-Lewis, Senior Vice President, Strategic Partnerships and ICB at United Negro College Fund, on the financial sustainability of higher education and the impact on institutions.
