Last year, Ithaka S+R published Instructional Quality, Student Outcomes, and Institutional Finances, a white paper commissioned by the American Council on Education (ACE) that explored the relationship between institutional finances and instructional quality, asking whether improvements in instructional quality can increase a postsecondary institution’s net revenue. It’s an important question, as many higher education institutions are under strong pressure to improve student learning outcomes as they face increasing financial constraints.

The conventional view is that increases in instructional quality require increased instructional expenditures. This view, along with the high initial costs of reforms or new initiatives, often discourage institutional leaders from investing. However, it misses the possibility of a feedback loop mediated by increased student success. For instance, instructional improvement can increase the number of students who pass the reformed course, thereby increasing the likelihood those students are retained. This, in turn, can increase revenue by an amount that exceeds the cost of instructional improvement, yet institutional leaders are rarely aware of this possibility. Gaining a better sense of the potential financial return on investment (ROI) of implemented reforms can greatly assist institutional leaders in deciding whether, and how much, to invest in a particular reform initiative.

To this end, Ithaka S+R and ACE partnered to develop a tool to help institutional leaders understand more fully the potential ROI for specific types of instructional improvement reforms. Today, we are releasing a fully functioning beta version of the tool in Excel, accompanied by an overview paper that describes the tool’s context, the methodology used to develop it, and how it estimates the potential ROI for select instructional improvement efforts.

The tool aims to engage users in a simple and systematic evidence-driven exercise, helping them think through the key components of the instructional reform they are considering, the cost of the reform, and its potential ROI. While some costs and benefits fall outside of the scope of this tool, it does address common instructional improvement efforts that our research suggests will be useful to many leaders and stakeholders.

We’ve also published an example version, which includes hypothetical values for a fictitious college. In the appendix of the overview paper, we provide a step-by-step walk through of the tool, which includes screenshots. Users can refer to both to better understand how the tool functions and estimates a ROI.

We invite you to engage with the tool, and would love to gather feedback on your experience, including what you liked, what needs improving, and what, if any, factors we may be missing from a ROI estimate, by leaving a comment below or contacting us.