Using our Program Economic Analysis (PEA) tool, we work with dozens of clients around the country and in various sectors to understand margins generated by academic programs. Our clients’ academic margins have broad variability, so there’s no “magic number” on margin to indicate a financially healthy institution. However, we field myriad questions about benchmarks—aggregate information about other institutions’ academic margins—and for good reason. Benchmarks can be very helpful in understanding where you have room to improve and what constitutes a realistic goal for your academic operation.
What if you had insight into your academic margins with PEA? In addition, what if you knew how your academic margins compared to similar institutions? What would you do with that information, and how would it inform your goal-setting process?
In this month’s edition of our PEA use case series, we preview various benchmarking data from popular programs using real client data and detail how you can access it for your next fiscal year (FY).
Comparing Yourself to the Field
The PEA tool comes with vast information about almost every aspect of your operation. It visualizes overall institutional margin, as well as valuable information about academic programs, including:
- Margin generated by net tuition revenue from tuition and fees minus direct expenses to academics
- Net tuition revenue and discount rate
- Enrollment trends
- Credit hour production
- And more
Our clients often want to know how they stack up on these big revenue and expense drivers. Here are some benchmarks from real client data in FY 24 and how to find numbers for your institution in your dashboards.
| Unit | Metric | Benchmark (FY 24 – PEA Clients) | Location in Your PEA Dashboards |
|---|---|---|---|
| Total Contribution Margin for Academic Operation | For all programs combined | 46% | Summary KPI |
| Psychology | Program-level margin (see definition above) | 54% | Program Economics |
| Enrollment trend | +3.6% | Program Trends | |
| Discount rate | 51.2% | Program Tuition | |
| Nursing | Program-level margin (see definition above) | 38% | Program Economics |
| Enrollment trend | -5% | Program Trends | |
| Discount rate | 47% | Program Tuition |
Benchmarks are not necessarily targets. Benchmarks are just indicators of what other institutions are doing, and they may not be instructive about how you should run your academic operation. Operational targets for margins and enrollment should be based on your institutional goals.
Accessing Benchmarks in Your PEA Data – Coming Soon
We have been providing ad-hoc benchmarks to clients for years. Now, we bring these insights directly to your PEA dashboards, starting with your FY 25 data. You read that right! In early summer 2025, Forvis Mazars will launch its newest version of PEA with three significant upgrades:
- Institution & Program-Level Benchmarking: To understand how you compare to the field without ever leaving your PEA dashboards
- What-If Scenario Modeling: To model the potential impacts of big revenue and expense drivers and gain confidence in the decisions you’re making in your academic operation
- Enhanced User Interface: To better glean key insights from streamlined design and more interactive features
We hope you are as excited about these new features as we are! We’ll share updates as they are available throughout this series. Please contact our higher education consulting team at Forvis Mazars if you have questions about how to leverage your new and improved PEA dashboards. Sign up for Higher Education FORsights using the button below to be notified about these exciting updates!