What is data’s role in COVID-era talk about colleges’ financial health?

Big data is making its way into higher education, and the companies helping make sense of it are hopeful colleges can use it to confront the array of challenges the pandemic is throwing at them. 

In the months before the coronavirus shook up U.S. higher ed, these companies and even university consortia were trying to improve how they gathered and analyzed the multitudes of student and administrative information they were gleaning from campus. The movement, which some thought could “save” higher ed, even had a major ed tech industry group’s support, though the shift hasn’t been without criticism

Now, with the pandemic stressing schools’ bottom lines, the discussion of reducing expenses and becoming less tuition-dependent is again front and center. To learn more about the role of data and analytics in that conversation, we talked with Darren Catalano, CEO of HelioCampus, an analytics company that spun out of the University of Maryland Global Campus in 2016 and works with around two dozen colleges.

HelioCampus last week announced its first acquisition, ABC Insights, a company that helps colleges benchmark their costs relative to other institutions. It was created out of a business incubator at the University of North Carolina at Chapel Hill. With the addition of ABC Insights, HelioCampus will work with more than 75 institutions. 

We talked with Catalano about the acquisition and how colleges can think about gathering and using data amid the pandemic.

Editor’s Note: This interview has been edited for clarity and brevity.

EDUCATION DIVE: Can you tell me what ABC Insights brings to HelioCampus and how that’s going to be integrated?

DARREN CATALANO: This lets us expand our focus not only to help institutions grow their resources but also now to help them rationalize their cost structures. Prior to COVID, a lot of colleges and ed tech vendors were focused on growing resources and not on rationalizing cost structure. As institutions are responding to COVID and having to plan for the future, they’re saying they can no longer raise prices and can’t just focus on growing resources. 

ABC Insights allows you to benchmark your costs across administrative functions and look at spending in a detailed manner and compare yourselves to a peer group. Looking at your administrative costs is a nonoffensive place to start. What we’re planning to do with the ABC Insights integration is extend that benchmarking capability to academic and other functions.

If colleges need to get a better sense of what they’re spending and why, what data or other information should they be looking at?

You need to look in three areas: growing resources, program offerings and rationalizing the cost. Depending on the institution’s specific pain points, they’ll prioritize one of these areas. Our experience, both at the University of Maryland Global Campus and now with our clients, is that it’s never one thing, metric or initiative. It’s 10 things together that make a big impact. It has to be a holistic plan.

What are some of the limitations for colleges gathering and using data?

Generically, the issue is the concept of colleges being data rich and information poor. Institutions have systems that don’t connect natively. You have to join them together into comprehensive data models, and then you need to help administrators and other stakeholders understand the data. 

With student success, colleges can already access a variety of relevant data, including prior academic work, current academic performance and financial need. But that’s just part of the story. There’s other data available but not easily accessible because you have to get it from systems and join it together. 

Darren Catalano, CEO of HelioCampus

Darren Catalano is the CEO of HelioCampus.

Permission granted by HelioCampus


And then there’s the data that is not captured, but it’s hugely important. That is the real blind spot, in my opinion. This is the data that gets around mindset — students’ concerns, career aspirations. Are they having trouble with housing or roommates? Are family finances causing additional stress and distracting them from their studies? Are they struggling to adjust to the new realities of life and learning in the era of COVID? 

This is where institutions have a greenfield opportunity, and this gets into academic advising. It’s not only having those conversations, but documenting them and putting them in a system in a structured way to get a more holistic view of that student. 

Do you see the pandemic as an accelerant in addressing those blind spots?

There’s pros and cons, right? COVID has given us access to more data than ever before. As institutions have moved their courses online, even for campuses that reopened, we’re starting to capture and accumulate much more data around student engagement. For example, how they’re interacting with the course materials, and engagement with their peers and faculty to the extent they’re doing so in the system. 

It’s also exacerbated these blind spots. This is not just in higher ed, I feel this running HelioCampus. You’re so much more disconnected with your staff, there’s Zoom fatigue, and you’re not having the conversations you would have in person. Institutions, meanwhile, are focused on living to fight another day and on students’ safety and health.

Where do you think colleges should be focusing their resources right now when it comes to using analytics to track the areas you mentioned, like administrative spending, new programs and growing resources?

In general, institutions need to begin rationalizing their cost structures. I think you’re going to see boards of trustees get more involved, given their fiduciary responsibilities, and really force these conversations. COVID has been a catalyst and tipping point to address discussions that have been deferred for many years around this concept of financial sustainability. What are the right enrollment levels for the institution? How do we differentiate our academic programs and support the local and regional economy with the right operating model for the university? 

Can you go into more detail about what rationalizing the cost structure entails, particularly in light of COVID?

Institutions that run a structural deficit, where their operating expenses exceed their tuition revenues, each year have to make up a structural deficit through sources like auxiliary revenues, alumni giving, endowment interest income and, for public institutions, state appropriations. 

Rationalizing your cost structure is asking whether that is sustainable. Most colleges are going to begin to say it’s not. And the question becomes how do they align revenues and costs to be less dependent on any fluctuation of these other revenue streams. That begins by looking across the board. Our focus now with ABC Insights is on helping optimize the administrative spend, but that’s going to have to extend into academic affairs and other areas of the institution.

Why hasn’t this been done before? Was it simply that there hadn’t been a catalyzing event like COVID?

It’s a well-known secret in higher ed that institutions are running really tight. These discussions generally have been had at the board of trustees levels. And they’ve just been deferred because institutions have been able to live to fight another day, get through the year, manage to a budget, and so forth. It really has taken COVID as a catalyst to say we can’t anymore. Even if COVID didn’t come, this was going to come to a head because institutions can no longer just raise tuition and grow enrollments.

What do you see as the outcome for the sector of this exercise? 

I don’t know, but what I would say is it’s not unreasonable to see that many institutions are going to have to become smaller and more focused and differentiated to ensure their sustainability. I think you’re going to see systems look at different opportunities of what activities should be centralized. I don’t know that mergers and acquisitions are going to be a big trend, but you’ll see systems consider collapsing institutions or creating affiliations with shared administration. I think you’re going to see a lot of different models be investigated and explored. 

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