Expert criticizes
funding at UHA consultant suggests tuition
hikes would offset a gap
of more than $80 million
The University of Hawaii is underfunded by more than $80 million a year compared with similar public universities and likely needs to raise tuition to help fill the gap, says a consultant hired by the university.
Dennis Jones, president of the National Center for Higher Education Management Systems, said UH lacks a financial strategy to address the problem.
The state is unlikely to provide an additional $80 million a year for higher education, so "that means that tuition is going to have to fill maybe even a substantial part of that gap," Jones said in a telephone interview from Boulder, Colo.
UH Vice President for Academic Affairs David McClain said there are no plans to increase tuition until after a previously approved annual 3 percent tuition increase is completed in 2006. However, he said a tuition increase is something that has to be discussed.
"We've not begun that process in any serious way, but we will," McClain said.
Jones said UH tuition -- now at $1,656 a semester for full-time undergraduates at Manoa and $4,896 for nonresidents -- is low when compared with similar institutions.
He said the university needs to develop a financial plan to figure out "how much of a necessary increase needs to be funded by state appropriations, how much of it needs to be funded by tuition and, if you're going to raise tuition, how much you put into a student financial aid program to make sure education is affordable."
Jones said the university does not have a systemwide financial plan to address how it will pay for faculty raises and other priorities.
He noted that decisions on tuition, financial aid and state funding are not coordinated. For example, tuition and student aid policies are devised in separate offices, and there is no statewide student financial aid program.
Jones also recommended that the university identify what the needs of the state and its citizens are and how the university can serve those needs.
"What are the priorities, what are the three or four things the university has to do in service to the state?" Jones said. Once those needs are agreed upon by state government, the private sector and people inside the university, then the system can move forward to try to achieve them.
"There is a strong need to find 'the message' and build consensus around it," Jones wrote in his report.
Some aspects of the university's new strategic plan are a good start, Jones wrote, pointing to goals such as working with K-12 education and responding to work-force and economic development needs.
However, he noted, "the strategic plan is a rhetorical statement without sufficient detail to provide a guide to action."
Sam Callejo, chief of staff at UH, said he and other university officials are working on a financial plan to be presented in time for the next two-year state budget session, which runs from 2005 to 2007.
McClain said each UH campus is talking with the communities they serve, looking at current programs, what programs they would like to offer and how to finance them.
McClain said since Jones visited UH in July, the university has begun implementing the strategic plan, which called for more than $100 million a year in additional spending to bring the university system into the top tier of universities by 2010.
However, since the Legislature was unable to fund the strategic plan, "the next step for the system is to say what of the plan can we implement without significant financial resources" and to look at other sources of funding besides the state to carry out the plan. Those funding sources would include more than just tuition, he said.
For instance, he said, the university needs to do more to increase income from "auxiliary services," which McClain also calls "entrepreneurial activities," such as executive education services and fees for having the chemistry lab do tests for local industry.
Jones pointed to North Dakota as a system the university can emulate. He said the legislative leadership, governor's office and private sector meet once a year and look at data on how the university is making progress toward mutual goals.
"In North Dakota they have come together and said the most important thing we have to do here, like Hawaii, is to expand and diversify the economy, and here's what we're going to do about that," Jones said.
McClain said Jones was paid about $10,000 for the report. He met with top system administrators, including UH President Evan Dobelle and several chancellors. He also conducted workshops for senior UH system officials and made several presentations from July 9 through 11.
The National Center for Higher Education Management Systems is a research and development center founded to improve the management effectiveness of colleges and universities.