Measuring financial implications of an early alert system

Abstract

The prevalence of early alert systems (EAS) at tertiary institutions is increasing. These systems are designed to assist with targeted student support in order to improve student retention. They also require considerable human and capital resources to implement, with significant costs involved. It is therefore an imperative that the systems can demonstrate quantifiable financial benefits to the institution. The purpose of this paper is to report on the financial implications of implementing an EAS at an Australian university as a case study. The case study institution implemented an EAS in 2011 using data generated from a data warehouse. The data set is comprised of 16,124 students enrolled between 2011 and 2013. Using a treatment effects approach, the study found that the cost of a student discontinuing was on average $4,687. Students identified by the EAS remained enrolled for longer, with the institution benefiting with approximately an additional $4,004 in revenue per student over the length of enrolment. All schools had a significant positive effect associated with the EAS and the EAS showed significant value to the institution regardless of the timing when the student was identified. The results indicate that EAS had significant financial benefits to this institution and that the benefits extended to the entire institution beyond the first year of enrolment.