Higher Ed Shark Tank? Mark Cuban Invests in Student Retention Efforts

Solutions that keep students enrolled in higher education have drawn the attention of a popular investor.

Analytic solutions that can help keep students enrolled in higher education are in big demand. They're also something that high-stakes investor Mark Cuban has his eye on.

Cuban, a billionaire investor and one of the hosts of Shark Tank, told Bloomberg Business that he is putting his money into tech solutions that raise student retention rates. Why? Colleges are losing millions of dollars each year from student dropouts.

Using a hypothetical example, Cuban said a school that loses 1,000 students, each paying $40,000 a year, suddenly faces a $40 million problem.

“I’m looking from an investment perspective for companies that support keeping kids in school,” says Cuban in an interview on the Bloomberg Business program Market Makers. “If a school keeps a kid and graduates them in four years, that’s a much more cost-effective graduation for the school.”

Some schools have found success by employing analytics to closely monitor students’ performance in classrooms, then stepping in with an academic adviser to catch the students before their grades fall. Interventions like these could prevent some dropout cases, says Cuban.

Georgia State University has been using a financial-risk-tracking system, which has resulted in more than 3,000 interventions to help monetarily challenged students stay in school, according to a press release from the White House.

President Barack Obama hosted a higher education summit in December to devise new solutions to the problem of student retention. Such efforts are being bolstered by federal grant funding through the First in the World competition, which distributed $75 million last September to 24 higher education institutions.

California launched a similar grant project in March, backing 14 California institutions and their plans with $50 million in state funds.

The student retention problem isn’t the only aspect of higher ed that has peaked Cuban’s investment interest. He sees another wave of changes coming from advancements in e-textbooks that incorporate analytics.

Companies such as Packback, which Cuban invested $250,000 in on Shark Tank, offer e-textbook rentals that create a new pricing model for students. Packback allows students to rent books for between $3 and $5 each day.

"You can get your books the way you need them, when you need them, at the price you need them, and create new revenue streams for publishers," says Cuban.

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Apr 21 2015

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