VIRGINIA BEACH, VA —June 24, 2008 —The Educational Policy Institute, a non-profit research think tank based in Virginia with offices in Toronto and Melbourne, officially unveiled a new online tool for postsecondary institutions that provides them with data on the cost of student attrition.
The EPI Retention Calculator, a free service from the Educational Policy Institute and its sister site, www.studentretetention.org, allows users to input basic information, such as retention rates, tuition and fee charges, in-state and out-of-state students and prices, and creates an output that suggests how much money the institution loses by not retaining students. In addition, the EPI Retention Calculatorthen provides data on how much money is saved by increasing student retention and graduation rates.
"This is the most accurate calculator of its kind out there, which is important," says EPI President Watson Scott Swail, who designed the EPI Retention Calculator. "Institutions, especially CEOs of those institutions, need bottom-line information in order to make prudent decisions on their campus or campuses. The EPI Retention Calculator gives them an accurate perspective of net revenue based on their institutional investment."
Important to note is that the EPI Retention Calculator provides a conservative output of cost based entirely on student-based revenue plus government subsidies. It does not include the added institutional investment that goes toward recruiting and serving a typically large percentage of the freshman cohort that end up leaving. That figure, which can be calculated by the institution, is typically very large and should be added to the figure generated by the EPI Retention Calculator.
To see how the EPI Retention Calculator works, here are a few examples.
EXAMPLE 1. A four-year public institution. The image below illustrates the data inputed into the EPI Retention Calculator by user at Institution ABC. Information includes type of institution, number of full-time, full-year freshman students, percentage of out-of-state students, tuition and free charges per in-state and out-of-state student, the annual percentage increase in tuition and fee charges, the government (or other) subsidy per student (which can be calculated by the IR or finance office), and the annual retention rates for students, as defined as those who return the following year.
The image below provides the output for the above information. In the current academic year, the EPI Retention Calculator calculates that over $7 million are lost in this year from all students -- freshman, sophomore, and juniors that do not return the following year or semester. A second calculation focuses only on the cohort of freshman students supplied in the formula. For those students, the total cost of losing them and their projected revenue to the institution is over $11 million. A third calculator yields the total cost of losing students from ALL levels through all years of a typical four-year degree. This comes to almost $17 million. This number is based only on an entering cohort of 1,000 students.
At the bottom of the output is the revenue saved by increasing freshman-to-sophomore retention by factors of 2.5 percent. As you can see, for this academic year, increasing that rate by only 2.5 percent increases revenue by $346,512. Increasing that rate by 7.5 percent yields over $1 million in retained earnings.
EXAMPLE 2. A two-year public institution. The image below illustrates the data inputed into the EPI Retention Calculator by user at a two-year Institution. Information includes type of institution, number of full-time, full-year freshman students (the model does not currently allow for part-time students; an institution could generate an FTE and use it in this model), percentage of out-of-state students, tuition and free charges per in-state and out-of-state student, the annual percentage increase in tuition and fee charges, the government (or other) subsidy per student (which can be calculated by the IR or finance office), and the annual retention rates for students, as defined as those who return the following year.
Based on the 1,000 full-time freshman students entered into the model, the institution loses over $2 million by not retaining freshman-to-sophomore students, and saves $178,750 by increasing that retention rate by 2.5 percent and over $500,000 for increasing it by 7.5 percent.
The EPI Retention Calculator will be coming out with a model for proprietary institutions, and four-year private institutions can simply use the four-year model and leave the government subsidy at zero.
If you have any questions about the EPI Retention Calculator, please contact us at email@example.com or (757) 430-2200.
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The Educational Policy Institute is a 501(c)3 corporation based in Virginia Beach, Virginia with offices in Toronto, Canada, and Melbourne, Australia. The mission of the Educational Policy Institute is to “expand educational opportunity for low-income and other historically-underrepresented students through high-level research and analysis.” For more information on EPI, visit www.educationalpolicy.org.