The Financial Impacts of Student Retention on College Campuses

As costs continue to rise and the burdens of student loan debt remain in the national spotlight, students and parents are rethinking the value of higher education. The last few years have been marked by drops in enrollment and retention rates as students delayed college or decided to forego it altogether.

These changes can have immense financial impacts on college campuses, which are already grappling with increasing costs related to high inflation and a tight labor market. Enrollment and retention dips can create tighter operating budgets and drive colleges to cut back on programs and resources for student success, including scholarships and campus improvements. In the most dire cases, many colleges have been forced to merge with other institutions or shut down completely. 

The Role of Fundraising

Fundraising has become crucial for every college, as campuses work to make up financial shortfalls through the generosity of alumni, community members and other donors. The latest chapter of President to President delves into this topic. In “Making the ‘Case’ for Sustainability,” Murray State University President Robert L. Jackson, Ed.D., highlights the importance of effective fundraising and its role in the long-term sustainability of higher education. He recommends strategies for success that include developing a comprehensive plan, devoting ample time to fundraising, collaborating closely with various campus departments and maintaining positive relationships with alumni and local communities.

The Importance of Student Retention

While fundraising efforts are indeed crucial, they’re just one part of the equation. Student retention is also an essential piece of the puzzle, and it’s an area where colleges can make a huge impact. Helping students feel a sense of belonging on campus can improve retention rates and academic outcomes, which contribute to the college’s long-term success and viability.

Sodexo’s research has revealed that the vast majority of students recognize and are looking to fill the need to belong on campus, with 82% of students reporting that they seek a friendly atmosphere where they feel they fit. This is students’ second-highest priority when choosing a college, ranking just below affordability and well above institutional prestige. And it’s no wonder, given the pervasive sense of isolation and anxiety students have reported in recent years. More than 60% of students report feeling overwhelmed and anxious while in college, and feelings of loneliness have risen 65% since 2020.

Campus Dining: An Invaluable Tool for Student Engagement

Students need easy ways to socialize with peers and form real connections on campus. A robust campus dining program with a strategic focus on student engagement is an excellent way to encourage the social connectedness that supports retention and helps students thrive.

Food provides more than physical sustenance. It creates opportunities to connect. The dining hall can serve as a hub of activity, where students build camaraderie and enjoy a strong sense of community.

Encouraging students to dine on campus has far-reaching benefits. According to recent research, 80% of students who had a meal plan for three years reported that they had established rewarding relationships with peers, compared to only 55% of students without meal plans.

Sodexo recently developed a new engagement series to build on the sense of community that’s an inherent part of campus dining. In fall 2023, we launched SPARK, a new strategy for enhancing student engagement to improve retention and recruitment. SPARK is designed to combat stress, anxiety and isolation among college students through activities and promotions that nurture social connections. Examples include meet-and-greet mixers, community dining tables and alignment with campus clubs and groups to host and support special events.

Belonging: The Key to Everyone’s Success

A college’s financial stability is intricately tied to its ability to retain students and provide them with a supportive environment that ensures success. Student retention is key to a college’s long-term viability, and a sense of belonging is a crucial factor in student retention. When students feel like they are truly part of the campus community, they are more likely to actively engage in campus life and ultimately achieve their academic goals.