Simplified Cost-Benefit Analysis

Simplified Cost-Benefit Analysis

Cost, Benefit, Productivity, Efficiency, Effectiveness
  • Strategic Planning
0
Colorado Community College System (CO)
http://cccs.edu

System of 13 community colleges located throughout Colorado in rural, suburban, and urban settings, that educates over 134,700 undergraduate students and trains more than 17,000 workers each year through various programs. 27% of the undergraduate students served are minorities, 59% are female, and the average age is 28. Each year, almost 27% of students take at least one remedial course.

  • Institutions
  • Institutions

PURPOSE

Many effective and innovative programs/strategies that improve student outcomes are never institutionalized or brought to scale.

  • Provide decision-makers with a tool for comparing effective programs/strategies that improve student outcomes and determining which programs/strategies to replicate and fund.

  • Make the tool simple enough for program administrators with no background in finance and limited access to student and financial data to utilize.

  • Determine whether-and when - the upfront costs of implementing effective strategies that improve student outcomes will be recouped with the revenue generated from increased retention.

DESCRIPTION

In the current climate of budgetary constraints and increased accountability, productivity has emerged as a major issue within higher education policy discussions. The call from public policy experts, foundations, and the general public is loud and clear: “Improve student outcomes, and at the same time, increase the cost-effectiveness of programs.” Though some analysts have recommended changes in state funding mechanisms to help prioritize certain outcomes, the reality is that colleges urgently need to be able to make good decisions under existing policies. The Simplified Cost-Benefit Analysis methodology is based on the assumptions that additional resources are required to increase student success, that community colleges are under-funded, and that the funding that colleges receive is based on enrollments rather than outcomes. It provides colleges with a methodology to evaluate the cost effectiveness of investments in specific programs and strategies. Through the collection of a limited amount of data, this tool provides program administrators and college leadership with the information needed to answer the question of whether the costs of implementing a specific intervention can be recouped within a reasonable amount of time to warrant the continuation and/or expansion of the program/strategy.

The Simplified Cost-Benefit Analysis provides college leadership with the information needed to make timely, data-driven decisions related to approving, sustaining, or institutionalizing programmatic innovations. By engaging faculty and program staff in a transparent process that links continued program investment with student outcomes, the Simplified Cost-Benefit Analysis enhances the relationships between the programmatic and business sides of the college, furthers authentic communication, and allows staff to work collaboratively toward the shared goal of improving outcomes for students. A full report describing the Simplified Cost-Benefit Analysis as well as a template and many examples are available online at http://www.cccs.edu/Research/costeffect.html

Can be modified to incorporate additional costs and/or periods of evaluation.

RESULTS

  • Program administrators were able to provide data.

  • The tool was successful in determining whether or when upfront costs would be be recouped.

  • Use of the tool resulted in a program being institutionalized, replicated or brought to scale.

The tool has been successfully used at the Community College of Denver and Front Range Community College to justify the expansion of two programs begun in 2005 through a grant from the Lumina Foundation for Education. The FastStart @ CCD program is an accelerated instructional approach for remediating students testing into multiple levels of developmental education. This program has been expanded to serve 650 students in 2010-11. At Front Range Community College, the Learning Communities program that pairs a developmental English class with a college-level course in another subject like Literature, Political Science, or Psychology has been expanded to all three college campuses.

Even in these tight economic times, programs that have some significant additional costs were not only maintained but expanded because it could be shown that their benefits in terms of increased revenue to the college were greater than their costs. In the case of FastStart at CCD, the break-even point where costs=benefits took place in term 2 during the pilot and in term 1 when the program was brought to scale.

RESOURCES AND LESSONS LEARNED

The resources needed include an IR department that can provide credit hour data for the new program/strategy and a comparison group, knowledge of the incremental cost of the program/strategy that is above and beyond the cost already incurred, and a champion for the tool who is willing and able to support program staff through the process.

  • There is nothing to purchase. The only cost is time.

  • Although the tool is simple, some program administrators need the support of an "expert" before they feel comfortable with entering data into and discerning the outcomes of the tool.

This tool has been highlighted in a webinar as part of The Joyce Foundation Shifting Gears Initiative. The tool can be adapted as necessary to work with other sorts of innovations or changes in funding policies.

FOR MORE INFORMATION

http://www.cccs.edu/Research/costeffect.html

http://www.shifting-gears.org/public/webinar/InnovationCostBenefitModels...

Kristin Corash
Associate Vice President Strategic Planning and Research
Colorado Community College System
9101 East Lowry Blvd
Denver, Colorado 80230
Phone: 303-595-1560

kristin.corash@cccs.edu

Kristin Corash
Associate Vice President Strategic Planning and Research
Colorado Community College System
Phone: 303-595-1560

kristin.corash@cccs.edu