Tuition Proposal Academic Years 2017-18 to 2019-20

Risa E. Dickson Vice President for Academic Planning and Policy

July 2016

Overview

Schedule and Process

Tuition-Setting Goals, Parameters and Considerations Presented

Summary of Public Meetings

Review of Tuition Proposal

Recommendation

2 OVPAPP Jul 2016

Tuition Schedule

3

1. Research, policy review and proposal preparation Fall 2015 – Spring 2016

2. BOR tuition setting discussion January 2016

3. BOR reviews tuition proposal prior to public meetings February 2016

4. Proposal distribution / public meetings March – May 2016

5. Revisions May 2016

6. BOR consideration and action July 2016

7. Filing with Lt. Governor July 2016

OVPAPP Jul 2016

Tuition-Setting Goals

Ensure access to public higher education for every qualified Hawai‘i resident

Keep higher education affordable

Modernize and repair facilities and campus environments to be safe, sustainable and supportive of modern teaching & learning, and research practices

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Parameters and Considerations Presented Regents Policy 6.202

I. Relative standing in terms of tuition charges at like regional and national institutions of higher education

II. Differential tuition rates by unit missions, student level (undergraduate, graduate, professional), and residency

III. Accessibility and the mix of students (ethnic background, income levels, residents and non-residents, etc.)

IV. Financial aid availability and use

V. The cost of education and the sharing of that cost between students and the general public

5 OVPAPP Jul 2016

Tuition Proposal Meetings Held meetings from March through May to

share the proposal and to solicit feedback 13 public meetings (~230 people attended) 3 internal meetings (Student Caucus, Mānoa ASUH,

ACCFSC)

Oral and written testimonies were received in person and via email, and any questions asked were answered during the meetings

A summary of the testimonies have been submitted to the Board of Regents and UH administration for review and consideration

6 OVPAPP Jul 2016

Summary of Testimony Received 52 oral and written testimonies; 3 student

government resolutions

Most opposed the proposed increases; a few supported the increases

Opposition cited affordability and financial hardship; a few objected to the use of tuition for deferred maintenance

Other comments included requests for transparency in how funds from the increase are spent, and consideration of ways to reduce expenses rather than raising tuition

7 OVPAPP Jul 2016

Our Commitment

To ensure access to every qualified Hawai’i resident, to keep higher

education affordable and to invest in our facilities so that our students have

modern classrooms and learning environments.

This proposal is part of a long-term strategy, intended to invest approximately $100M to address the current $500M deferred maintenance backlog over three years beginning in 2017-18.

8 OVPAPP Jul 2016

Current Deferred Maintenance Backlog (Fiscal Year)

$227.4 $260.4 $239.2

$346.4 $380.6 $406.7 $372.8 $420.5

$34.5 $29.8

$25.9

$16.3 $19.9

$21.3 $21.4

$23.0

$39.3

$78.2 $69.1

$64.9 $60.3

$58.9 $50.6

$59.2

$301.2

$368.4 $334.1

$427.6 $460.8

$486.9 $444.8

$502.7

0

100

200

300

400

500

600

2008 2009 2010 2011 2012 2013 2014 2015

$ M

illio

ns

MAN HIL UHCC

9

Note: No backlog at UH West O‘ahu

OVPAPP Jul 2016

Tuition Proposal

10 OVPAPP Jul 2016

Tuition Proposal Basics

A 3-year tuition schedule from 2017-18 to 2019-20 with modest increases

Non-resident tuition to be raised the same $ amount increases as resident tuition

No increases for UH Mānoa Professional Schools

No increases in UH Community College apprenticeship fees

Tuition revenue increases will be used only to address facilities needs, not general operations

11 OVPAPP Jul 2016

Proposed Tuition Increases UH Mānoa

Full-Time Resident Undergraduates: $216 / year

Full-Time Resident Graduates: $312 / year

Full-Time Non-Resident Undergraduates and Graduates: Same $ amount increases as residents ($216 and $312 per year, respectively)

Professional Schools: No increases

12 OVPAPP Jul 2016

Proposed Tuition Increases UH Hilo

Full-Time Resident Undergraduates: $0 in Year 1; $72 in each of Years 2-3

Full-Time Resident Graduates: $0 in Year 1; $120 increase in each of Years 2-3

Non-Resident Undergraduates and Graduates: Same $ amount increases as residents ($0 in Year 1, then $72 and $120, respectively, in each of Years 2-3)

Graduate Nursing: $0 in Year 1; $192 increase in each of Years 2-3

College of Pharmacy: $240 / year

13 OVPAPP Jul 2016

Proposed Tuition Increases

UH West O‘ahu

Full-Time Residents: $0 in Year 1; $72 increase in each of Years 2-3

Full-Time Non-Residents: Same $ amount increase as residents ($0 in Year 1; $72 in each of Years 2-3)

UH Community Colleges

Full-Time Residents: $0 in Year 1; $60 increase in each of Years 2-3 (revised)

Full-Time Non-Residents: Same $ amount increase as residents ($0 in Year 1; $60 in each of Years 2-3) (revised)

Apprenticeship Fees: No increases

14 OVPAPP Jul 2016

2016-17 Actual

2017-18 Proposed

2018-19 Proposed

2019-20 Proposed

UH Mānoa Resident

Undergraduate $10,872 $11,088 $11,304 $11,520

Graduate $15,288 $15,600 $15,912 $16,224

Non-Resident

Undergraduate $32,904 $33,120 $33,336 $33,552

Graduate $36,768 $37,080 $37,392 $37,704

15

Proposed Annual Full-Time Tuition By Residency and Level

AY 2016-17 rates were approved by BOR on 5/21/15.

OVPAPP Jul 2016

2016-17 Actual

2017-18 Proposed

2018-19 Proposed

2019-20 Proposed

UH Hilo Resident

Undergraduate $7,200 $7,200 $7,272 $7,344

Graduate $11,496 $11,496 $11,616 $11,736

Grad Nursing $18,744 $18,744 $18,936 $19,128

Pharmacy $23,376 $23,616 $23,856 $24,096

Non-Resident

Undergraduate $20,160 $20,160 $20,232 $20,304

Graduate $26,328 $26,328 $26,448 $26,568

Grad Nursing $37,392 $37,392 $37,584 $37,776

Pharmacy $40,320 $40,560 $40,800 $41,040

16

Proposed Annual Full-Time Tuition By Residency and Level

AY 2016-17 rates were approved by BOR on 5/21/15.

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Proposed Annual Full-Time Tuition By Residency and Level

17

2016-17 Actual

2017-18 Proposed

2018-19 Proposed

2019-20 Proposed

UH West O‘ahu Resident $7,200 $7,200 $7,272 $7,344

Non-Resident $20,160 $20,160 $20,232 $20,304

UHCCs Lower Division

Resident $3,024 $3,024 $3,084* $3,144*

Non-Resident $8,160 $8,160 $8,220* $8,280*

Upper Division

Resident $7,200 $7,200 $7,272 $7,344

Non-Resident $20,160 $20,160 $20,232 $20,304 * Revised AY 2016-17 rates were approved by BOR on 5/21/15.

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Assumptions for Planning Investments in Facilities

Enrollment projections will be held constant for the duration of the proposed tuition schedule.

Fluctuations in enrollments will be handled within campus operating budgets.

Institutional aid will be maintained at current percentage levels.

Additional tuition revenues generated by modest rate increases will be used only to address facilities requirements and the deferred maintenance backlog, not general operations.

UH will have revenue bond authority.

18 OVPAPP Jul 2016

Projected Change in Net Tuition Revenue and Impact of Investment / Approach Under Assumptions

19

UH Unit and Intended Use 2017-18 Projected

2018-19 Projected

2019-20 Projected

UH Mānoa Reduce deferred maintenance backlog using revenue bonds

$2.36 $4.72 $7.08

UH Hilo Establish sinking funds for capital renewal and maintenance, consistent with national best practices

$.06 $.32 $.57

UH West O‘ahu Establish sinking funds for capital renewal and maintenance, consistent with national best practices

$.00 $.13 $.25

UH Community Colleges Eliminate deferred maintenance backlog by Year 3 using revenue bonds; funds from 2016-17 will be used for Year 1 debt,

$0.00 $1.10* $2.20*

OVPAPP Jul 2016

* Revised

Reporting on the Use of Tuition Revenue Increases

The UH Administration will provide an annual accounting of the actual tuition revenue generated through this increase and how it has been used to address facilities requirements and the deferred maintenance backlog through revenue bonds, sinking funds, etc.

20 OVPAPP Jul 2016

Recommendation

It is recommended that the Board of Regents approve the proposed tuition schedules for 2017–18 through 2019–20 as provided in Attachment 1 to the President’s transmittal to the Board dated July 15, 2016.

21 OVPAPP Jul 2016

Appendix I Capital Financing

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Capital Strategy to Address Deferred Maintenance and Capital Renewal Needs

Capital Renewal Scheduled / Annual / Anticipated major repair and

major maintenance to upkeep facilities.

Deferred Maintenance Any capital renewal that is not addressed timely or on schedule that results in deferring the necessary

repair and maintenance.

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A Strategy for Addressing Capital Renewal and Deferred Maintenance Needs

Capital Renewal via GO Bonds

Primarily funded by General Obligation (GO) Bonds appropriated by the Legislature.

Desired as lump sum funding to the University.

No debt of the University.

Annual capital renewal needs in UH between $60-80 million per year.

Additional GO Bond appropriations are desired and would accelerate reduction of deferred maintenance.

Deferred Maintenance via Revenue Bonds

UH can self-finance some reduction of deferred maintenance backlog through University Revenue Bonds.

Need legislative authority and Board of Regents approval to issue University Revenue Bonds.

Creates debt of the University.

$562 million in revenue bonds currently outstanding. FY16 debt service $46.2 million from all sources.

10-year deferred maintenance program would require more than $60 million of financing each year.

GO Bonds for capital renewal AND deferred maintenance projects would reduce debt service needs.

24 OVPAPP July 2016

Estimated Capital Capacity Under Assumptions UH – Mānoa

AY/FY 2017-2018 AY/FY2018-2019 AY/FY2019-2020

Assigned Revenue $ 2.36 million $4.72 million $ 7.08 million

Revenue Bond Issuance (est.) $ 30-35 million $30-35 million $30-35 million

UH – Comm Colleges

AY/FY 2018-2019 AY/FY2019-2020 AY/FY2020-2021

Assigned Revenue $ 0.00 $ 1.10 million $ 2. 20 million

Revenue Bond Issuance (est.) $ 0.00 $15 – 16 million $ 15-16 million

Annual Additional University Debt $ 30 - 35 million $45 – 51 million $ 45 – 51 million

TOTAL Capital for Deferred Maintenance $ 120 – 137 million

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Reference: Slide 19

Projected Debt Profile

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0

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000 FY

15

FY16

FY17

FY18

FY19

FY20

FY21

FY22

FY23

FY24

FY25

FY26

FY27

FY28

FY29

FY30

FY31

FY32

FY33

FY34

FY35

FY36

FY37

FY38

FY39

FY40

FY41

FY42

FY43

FY44

FY45

FY46

FY47

Refunding Series 2006A Series 2006A Series 2009A Series 2010A-1

Series 2010A-2 Series 2010B-1 Series 2010B-2 Series 2012A(R)

Series 2015A Series 2015B Series 2015C Series 2015D

Series 2015E Bonds FY2018 Bonds FY2019 Bonds FY2020

Annual debt service to the University could increase as much as $9.7 million/year to finance $135+ million in capital projects.

Bond Issuance Approvals

UH Board of Regents approve AY/FY2018-2021 tuition schedule.

2017 or 2018 Legislature would need to authorize the issuance of University Revenue Bonds.

Administration can only sell amounts of revenue bonds for which there is legislative approval and sufficient corresponding revenue to support all future debt service.

UH Board of Regents would have to approve specific bond issuance resolutions for each bond transaction to occur in FY2019, FY2020, and FY2021.

OVPAPP July 2016 27

There are additional Board of Regents reviews and approvals required along the way to implement this capital financing approach. Administration and BOR have opportunities

to tune numbers and adjust approach at any step along the way.

Appendix II Tuition Comparisons

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UH and Top 10 Mainland 4-Year Institutions Attended by Hawai‘i DOE Class of 2014

RANK BY ENROLLMENT STATE INSTITUTION CARNEGIE CLASSIFICATION FALL 2014

WHAT HI RESIDENTS

PAY

IN-STATE TUITION &

FEES

OUT-OF-STATE TUITION & FEES

WUE TUITION & FEES

1/

* HI University of Hawai‘i at Mānoa Research Universities (very high research activity) 797 10,620.00 10,620.00 29,412.00

* HI University of Hawai‘i at Hilo Baccalaureate Colleges--Arts & Sciences 217 7,036.00 7,036.00 19,036.00

* HI University of Hawai‘I - West O‘ahu Baccalaureate Colleges--Diverse Fields 195 6,888.00 6,888.00

18,888.00

1 NV University of Nevada, Las Vegas Research Universities (high research activity) 107 9,732.00 6,710.00 20,620.00 9,732.00

2 OR Pacific University Master's Colleges and Universities (larger programs) 47 38,510.00 38,510.00

38,510.00

3 AZ Northern Arizona University Research Universities (high research activity) 45 14,550.00 9,990.00 22,510.00 14,550.00

4 WA Washington State University 2/ Research Universities (very high research activity) 34 17,865.00 12,428.00 25,510.00 17,865.00

5 CO Mesa State College 3/ Baccalaureate Colleges--Arts & Sciences 33 10,294.50 7,116.00 17,720.00 10,294.50

6 AZ Grand Canyon University-Traditional

Master's Colleges and Universities (larger programs) 32 17,050.00 17,050.00

17,050.00

7 OR University of Portland Master's Colleges and Universities (larger programs) 30 40,424.00 40,424.00

40,424.00

8 OR Western Oregon University Master's Colleges and Universities (medium programs) 29 12,885.00 9,105.00

22,200.00 12,885.00

9 OR Portland State University Research Universities (high research activity) 28 11,056.50 7,794.00 23,319.00 11,056.50

9 OR Oregon State University Research Universities (very high research activity) 28 26,294.00 9,122.00 26,294.00

OVPAPP July 2016 29

1/ Calculated at 150% of the published in-state tuition plus the published in-state fees. 2/ Does not offer WUE rate to transfers 3/ Mesa State College was renamed in 2011 to Colorado Mesa University. The Statewide: Class of 2014 College Enrollment reported the institution as Mesa State College. Source: Hawai'i Department of Education (DOE) Class of 2014 college enrollment in the Fall semester following their high school graduation: Hawaii DXP

UH and Top 10 Mainland 2-Year Institutions Attended by Hawai‘i DOE Class of 2014

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1/ Calculated at 150% of the published in-state tuition plus the published in-state fees. 2/ University of Hawai'i Community College's Hawai'i DOE Class of 2014 enrollment is the sum of all 7 campuses from the report. The Tuition & Fees information was extracted from the AY 2014-2015 Tuition & Fees Schedule Report by UH Insitutional Research and Analysis Office. UH Maui College is the only UHCC campus to participate in WUE and has a different Carnegie classification - Associate's--Public 4-year Primarily Associate's. Source: Hawai'i Department of Education (DOE) Class of 2014 college enrollment in the Fall semester following their high school graduation: Hawaii DXP Tuition & Fees Data: NCES IPED Data Report

RANK STATE INSTITUTION CARNEGIE CLASSIFICATION

HAWAI'I CLASS OF

2014, FALL 2014

WHAT HI RESIDENTS

PAY

IN-STATE TUITION &

FEES

OUT-OF-STATE TUITION &

FEES

WUE TUITION & FEES

1/

* HI University of Hawai'i Community Colleges 2/

Associate's--Public 2-year colleges under 4-year universities 2,868 2,815.00 2,815.00 7,663.00

1 AZ Arizona Western College Associate's--Public Rural-serving Large 10 3,620.00 2,480.00 8,085.00 3,620.00

2 NM New Mexico Military Institute Associate's--Public Special Use < 10 5,321.50 4,536.00 9,647.00 5,321.50

2 CA Santa Barbara City College Associate's--Public Rural-serving Large < 10 6,836.00 1,374.00 6,836.00

2 CA Feather River Community College Associate's--Public Rural-serving Medium < 10 7,266.00 1,446.00 7,266.00

5 CA Sierra College Associate's--Public Suburban-serving Multicampus < 10 6,190.00 1,150.00 6,190.00

5 CA College of the Redwoods Associate's--Public Rural-serving Large < 10 6,846.00 1,182.00 6,846.00

7 CA San Diego Mesa College Associate's--Public Urban-serving Multicampus < 10 5,774.00 1,142.00 5,774.00

7 CA Orange Coast College Associate's--Public Suburban-serving Multicampus < 10 6,584.00 1,184.00 6,584.00

7 CA Ventura College Associate's--Public Urban-serving Multicampus < 10 7,050.00 1,388.00 7,050.00

7 CA Sacramento City College - Los Rios CC Dist Associate's--Public Urban-serving Multicampus < 10 7,272.00 1,104.00 7,272.00

UH and Top 10 Western Undergraduate Exchange (WUE) Institutions Attended by Hawai‘i High School Graduates

Fall 2015 Enrollment, AY 2015-16 Tuition Rates

UH & TOP 10 WUE STATE INSTITUTION CARNEGIE CLASSIFICATION

HI RESIDENT AT WUE

CAMPUSES FALL 2015

HAWAII RESIDENT WUE RATE 1/

PUBLISHED IN-STATE TUITION

2015-16 2/ 2015-16 2/

8 WA Washington State University 3/ Doctoral Universities: Higher Research Activity 53 15,534.00 10,356.00

2 AZ Northern Arizona University Doctoral Universities: Higher Research Activity 233 14,193.00 9,462.00

3 OR Western Oregon University Master's Colleges & Universities: Medium Programs 184 11,619.00 7,746.00

10 CO University of Colorado Denver Doctoral Universities: Higher Research Activity 33 11,106.00 7,404.00

9 OR Oregon Institute of Technology Baccalaureate Colleges: Diverse Fields 43 10,984.50 7,323.00

* HI University of Hawai‘i at Mānoa Doctoral Universities: Higher Research Activity N/A N/A 10,344.00

4 CO Colorado Mesa University Baccalaureate Colleges: Diverse Fields 148 10,059.00 6,706.00

6 OR Southern Oregon University Master's Colleges & Universities: Larger Programs 94 9,922.50 6,615.00

5 CO University of Northern Colorado Doctoral Universities: Higher Research Activity 97 9,558.00 6,372.00

1 NV University of Nevada, Las Vegas Doctoral Universities: Higher Research Activity 260 9,415.50 6,277.00

7 NV University of Nevada, Reno Doctoral Universities: Higher Research Activity 77 8,967.00 5,978.00

* HI University of Hawai‘i at Hilo Master's Colleges & Universities: Small Programs N/A N/A 6,912.00

* HI University of Hawai‘i - West O‘ahu Baccalaureate Colleges: Diverse Fields N/A N/A 6,912.00

OVPAPP July 2016 31

1/ Calculated at 150% of the published in-state tuition 2/ Preliminary release 3/ Does not offer WUE rate to transfers Source: UH Mānoa HI Resident HC Enrollment: IRAO DAPIR Enrollment (CENSUS), Table 4 WUE Institution HI Resident HC Encrollment: http://wiche.edu/info/publications/statReport0116.pdf Published In-State Tuition: NCES IPED Data Report

UH Mānoa Undergraduate Tuition and Fee Comparisons (Relative Standing)

32

10,794

24,099 26,931

29,412

42,394

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

UH Mānoa Undergraduate Tuition & Fees Relative to Other Flagships, 2014-15

4,646

8,499 10,230 10,620

17,502

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000 Resident

WICHE Average U.S. Average Hawai‘i

Non-Resident

OVPAPP Apr 2016

UH Mānoa Graduate Tuition and Fee Comparisons (Relative Standing)

33

UH Mānoa Graduate Tuition & Fees Relative to Other Flagships, 2014-15

Resident

WICHE Average U.S. Average Hawai‘i

Non-Resident

5,234 9,746

11,815 14,048

30,042

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

13,136 22,649

25,374

32,816

40,892

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

OVPAPP Apr 2016

Cost Comparisons (Relative Standing)

34

Undergraduates, UH and Local Institutions, AY 2015-16 UH, Chaminade, HPU, and BYU HI

$22,440 $21,780

$10,200

$5,100

$11,164

$7,332 $7,152

$2,948

$31,516

$19,788 $19,608

$7,940

HPU Chaminade BYUH (non-LDS)

BYUH (LDS)

UHM UHH UHWO UHCC UHM UHH UHWO UHCC

Annual Tuition & Fees

Private UH Resident UH Non-Resident

Note: UH Community Colleges tuition is charged on a per-credit basis for all enrolled credits effective AY 2001–02. The amount shown here is based on 15 enrolled credits per semester (UHCC median).

OVPAPP Apr 2016