The Relationship Between Retention & Revenue

For career education institutions, retention is a critical measurement of success.


Retention rates reflect an institution’s ability to graduate their students on time, which is a significant component of its reputation and a big selling point for prospective students. In addition, retention is associated with funding from the government and is directly tied to the amount of tuition dollars schools receive – or don’t!


In this post, we’ll take a look at the economic impact of improving retention and how institutions can achieve their retention goals.

How absences affect the bottom line

The majority of students who drop from their programs do so because they’ve missed too many hours to remain enrolled. If schools could ensure that more students show up to class, therefore increasing students’ chances of graduating, the result would be a considerable savings of tuition dollars each module.


To illustrate, let’s look at an example.


Consider a school of 100 students with an average tuition cost of $20,000. If 10 students drop out halfway through their program, $100,000 of tuition isn’t paid to the school. If a school could improve their retention and ensure that only 5 students dropped out halfway through the program instead of 10, that’d be just $50,000 of tuition missed. $50,000 saved every module quickly adds up to a significant amount of revenue gained back.


Increasing retention rates by even just a few percentage points can have major economic impacts for institutions. Now the question is, how can schools boost their retention rates and keep them consistently high? The answer is by using proactive retention strategies.

The power of proactive retention

A proactive retention strategy monitors students’ progress and addresses absences before students become at-risk of dropping out. The key element of proactive retention is having access to real-time attendance data.


With real-time insight into which students have checked in to their course and which haven’t, staff can begin their outreach to absent students immediately, before they become at-risk. Because staff are contacting students during the time they should be in class, the chances of reaching students are much higher. Institutions reiterate to their students how costly missing class is, improving the odds that they show up next time. In some cases, students can even get to class or log on to their online course before it’s over.

Real-time attendance data in action

Using a tool like CourseKey for attendance automation, institutions can gain access to real-time attendance data. Administrators can see the data through enterprise style dashboards that constantly refresh, giving admins real-time visibility into what’s actually happening in their courses.


Through real-time attendance visibility, institutions have been able to execute proactive retention strategies and achieve higher retention rates on a consistent basis.


Take the Institute for Business and Technology (IBT) for example. In 2017, IBT’s drop rate was hovering around 4%. To achieve their goal of a drop rate below 2%, they needed a change in retention strategy. Through CourseKey, they saw an opportunity to gain access to real-time attendance data and determine the LDA for students much earlier. By reaching out to absent students immediately and providing staff and students with visibility into attendance data, IBT was able to bring their drop rate below 2%.

Helping more students cross the finish line

By increasing retention rates by a few percentage points, institutions are not only helping more of their students achieve their goal of graduation, they’re also able to access additional tuition dollars they hadn’t previously budgeted for. With additional funds, institutions can invest in other initiatives like hiring more staff and faculty, expanding program offerings, improving campus infrastructure, and more.


Is your school reaching its retention goals? Find out how CourseKey can benefit your institution and help more of your students cross the finish line by requesting a demo below!

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