Authored by Jessie Brown, Analyst, Educational Transformation Program and Martin Kurzweil, Director, Educational Transformation Program
ACE commissioned this white paper as part of the Council’s collaboration with Strada Education Network to explore the question of whether improvements in instructional quality can increase a postsecondary institution’s net revenue. The paper provides a conceptual framework in which improvement in instruction leads to better student outcomes such as increased retention rates, decreased repetition of courses, and faster time to degree. These improvements in student outcomes, in turn, lead to increases in marginal revenue that are larger than the marginal costs of improving instruction and of serving a larger student population. Surveying the literature, we find some evidence supporting this hypothesis, though no previous study has explored it directly.