When K–12 educators hear “eROI” (educational return on investment), they may immediately think of the financial side of education: per-student spending, a district’s overall budget, federal versus state funding sources, etc. But measuring ROI in education requires understanding not only the costs of instructional resources, but also their impact on student learning outcomes.
Though easier said than done, this insight is critical as districts face budgetary constraints, more funding disruptions, challenges with hiring and retaining quality staff, and seismic changes reshaping what K–12 education looks like today and in the future.
In this article, we define what ROI in education means and how it equips K–12 leaders to make sound financial and instructional decisions. We will also share practical ways for administrators to apply eROI to budget planning and decision-making processes.
Why Measuring ROI in Education Matters
In the corporate world, leaders use a simple ratio of costs and profits to calculate ROI and understand the overall health of a business.
In contrast, K–12 leaders use eROI (or “educational ROI”) to understand their academic return on investment—meaning, how dollars spent on curricula, academic programs, staffing, professional learning, etc., drive student outcomes. Though eROI is complex to assess effectively, every K–12 leader needs this metric to:
- Ensure budgets and spending actually cultivate learning
- Use data, not gut checks, to make decisions
- Sustain long-term student success through high-impact investments
Aligning Budget With Student Outcomes
As a district leader, you must responsibly steward taxpayer dollars to support every student to succeed. But it can be challenging to see the academic impact of your purchases.
eROI clarifies the throughput. You can measure precisely how every dollar allocated towards programs under a strategic goal correlates with relevant student outcomes and under what conditions. That way, you can keep funding what works, reevaluate what could improve learning more effectively, and eliminate what isn’t shifting outcomes as expected.
Supporting Data-Driven Decision Making
How often do you face a tough decision with little to no concrete information to guide you? With eROI, you no longer have to wade through murky guesswork to know if a program is benefiting students. The evidence is in the metrics.
By way of example, consider how to measure the effectiveness of an after-school tutoring program designed to improve lagging reading achievement in elementary schools. Before eROI, a tight budget season might force you to cut that “supplemental” program.
But with eROI, you first map how student participation in tutoring impacts progress monitoring scores throughout the year, discovering which conditions yield the greatest academic gains for each dollar spent. This data may reveal that the investment in tutoring makes a significant positive difference in student growth and should be continued. eROI will also show under what conditions tutoring drives the greatest results so that schools can make adjustments to further maximize the impact of this investment.
Planning for Long-Term Success
Many administrators can find it difficult not only to track the long-term outcomes of multi-year strategic efforts, but also to weigh their successes against their costs, especially when budgets are constricted.
eROI analyses and strategy can be a constant amidst change. Tracking eROI over time gives leaders visibility into an initiative’s progress made (or lack thereof) and the opportunity to use small, incremental shifts to sustain multi-year investments as well as advocate for their continued funding.
Key Metrics for Measuring ROI in Education
Measuring returns in educational investments requires diligence. Districts must remain cautious of vendor-touted “ROI” metrics related to their products, as these numbers can often be misleading or inflated. True eROI involves triangulating student achievement, participation, and financial data from your district’s context, incorporating your district’s specific strategic goals into the equation.
Let’s explore example metrics that K–12 administrators might utilize when calculating eROI.
Academic Outcomes
Student achievement metrics like report card grades or state test scores are foundational in any eROI analysis and can help align instructional priorities with resources and funding.
For example, cross-referencing class assignments and report card grades against progress monitoring and state test scores may reveal patterns of grade in/deflation or even misaligned curricula, instruction, or assessments. Equipped with this clarity, districts can then deploy funding and resources accordingly to address these gaps.
Student Engagement
This broad category can include attendance rates, course completion, platform usage rates, and more. The metrics that matter for eROI calculations will vary by the investment under scrutiny.
For example, measuring engagement with a supplemental online curriculum means looking at license usage as well as frequency of platform logins. In contrast, student engagement with Tier III instructional services will concentrate on their attendance, as well as frequency and dosage of these services.
Remember, participation data measured in conjunction with achievement outcomes (such as benchmark reading scores) as well as cost data paint an accurate picture of eROI.
Financial Efficiency
No eROI analysis is complete without the financial details of an investment. Some metrics in this category come as no surprise, such as costs per license or student and overall costs of programs. District leaders may go further and translate other “costs” into financial metrics. These examples include the cost of teacher or staff time required to facilitate a program, technical costs required to manage hardware or student data privacy, and more.
Instructional Effectiveness
Districts spend immense amounts of time and money not only on teachers’ salaries but also on their continued growth and development through professional learning and coaching, all with the goal of improving learning outcomes.
eROI can help determine the impact of a major investment like coaching. Administrators can examine metrics such as:
- Overall student outcomes in coached classrooms versus non-coached classrooms
- Coaching meeting frequency and dosage versus observed changes in instructional practices
- Growth in specific skills mastery (as related to relevant teacher coaching goals)
Did you know? Grow by Level Data gives schools and districts a digital infrastructure to strengthen their unique coaching framework, saving time while supporting coaching fidelity to drive teacher growth.
Two Approaches for Measuring ROI in Education
K–12 districts largely approach measuring ROI in education from one of two angles:
- Evaluating their academic resources (the “forward” approach)
- Evaluating their student outcomes data (the “backward” approach)
Individually, each method sheds light on important correlations between a district’s financial investments and their intended academic outcomes. However, when leaders embrace both analyses together to calculate eROI, it reveals a deeper layer of understanding.
Let’s explore practical ways that a holistic approach to eROI equips administrators to make more nuanced financial and instructional decisions.
Evaluating Academic Resources
In this “forward” approach, administrators delve into the impact of individual academic resources, such as digital learning platforms, curriculum and materials, teacher professional learning investments, and more. Isolating a single investment and its impact on achievement helps clarify if and how that investment affects outcomes as anticipated.
Here are example questions you may ask as you investigate common academic resources and their efficacy:
- For which grade levels/schools/student subgroups is this curriculum available? How many teachers in each segment actually use it?
- How does teacher usage of a particular platform vary from classroom to classroom? School to school?
- How does participation in an after-school enrichment program correlate with relevant report card grades, benchmark scores, and other academic indicators?
Evaluating Student Outcomes
In this “backward” approach, administrators analyze student learning outcomes data first, including academic metrics discussed earlier alongside other indicators like graduation rates and skills mastery. The goal is to understand which students benefit most from current academic resources and, critically, which do not.
However, administrators must still tie these outcomes back to specific investments made to improve them. Here, student-level tracking—not only with achievement outcomes but also participation and cost data—is key. These metrics are what make eROI analyses more effective for strategic and financial decision-making than simply looking at program spend.
Best Practices for Measuring eROI in a K–12 Setting
Though each district sits within unique financial and academic circumstances, three best practices will support any organization to leverage eROI in decision-making and budget planning.
Build a Cross-Functional Team
Every team in a district makes decisions that affect student learning. By bringing together procurement officers, professional development directors, special education administrators, and more, leaders position their teams to share expertise and holistically take responsibility for getting the most learning impact out of district spending.
Ask the Right Questions and Standardize the Right Data
District administrators must also support their cross-functional team to establish a common language around eROI. That means asking the right financial and academic questions of any investment, as well as identifying the relevant metrics to track and measure the effectiveness of every dollar spent on a given program.
Align Stakeholders and Priorities
Last, district leaders can leverage ROI in education to align their entire organization with big-picture priorities.
It may start with mapping every academic investment back to a specific strategic goal or priority, or even revising a strategic plan based on the eROI of particular programs. Regardless, the point is to provide everyone, from the school board to parents to teachers, with a shared, data-driven roadmap for supporting student learning.
Watch our on-demand webinar to learn how the team at School District of Lee County leveraged each best practice above to align spending with key priorities and student outcomes.
Methods and Tools for Measuring Your District’s ROI
It is imperative to measure ROI in education beyond the financial resources behind learning. By incorporating student outcomes and participation metrics alongside costs, you can more accurately understand the academic impact of your district budget and funding allocations. With this holistic approach to eROI, you can then lead your teams to coordinate every investment to maximize your students’ success, both in the classroom and beyond.
Level Data: Maximize eROI
Embracing eROI may feel daunting at first, but you are not alone in this endeavor. Level Data’s Return On Instruction platform simplifies measuring the ROI of your educational investments by bringing together usage, impact, and financial data in one place. That way, you and your team are equipped with clear, real-time insights to guide every decision, no matter how big or small.
Take a self-guided tour to learn more.
