ANALYSIS: UH-Hilo Tuition Cost Outpacing Mainland Universities

Once considered a bargain, the cost of obtaining a degree at the University of Hawaii at Hilo has been surging over the last few years, rapidly outpacing the national average at a time when online education programs are set to shatter the traditional university system.

From “Cheap” to “Average”

According to the Department of Education, the average cost of in-state tuition for a four-year public university now stands at $6,669 per year. A full-time resident student at UH-Hilo can expect to pay $6,192 for the year 2013-2014, or $6,536 when fees are taken into account.

That’s a 50% increase from the $4,360 students paid in the 2008-2009 school year, for an average tuition hike of just over 8% per year, outpacing the average national increase of 5% annually.

Even more striking is how quickly the university is outrunning prices in the overall economy. Between 2008 and 2013, UH-Hilo tuition outpaced the overall inflation rate more than five times over.

With tuition set to climb another 7.4% in the 2014-2015 school year, the University of Hawaii at Hilo could soon rise above the national average.

Demand for Degrees Keeps Climbing

As the world economy came crashing to a halt in 2008, and the state job market went into free-fall, student enrollment at UH-Hilo soared as residents chose to seek degrees (often through student loans) instead of competing in a stale job environment.

Despite consistent tuition increases, enrollment reached a record of 4,139 in the fall of 2012, growing at an average of around 6% per year since 1986, nearly six times the growth rate of the island’s population.

University of Hawaii marine science students. Image courtesy.

Apart from a recession-induced spike, UH’s enrollment figures mirror a national trend toward higher education that dates back 50 years, sparked by Cold War-era efforts to out-educate the Soviets (the federal student loan program was started in 1958, after the launch of Sputnik).

Decades later, demand for degrees is still strong, now driven by the financial benefits college graduates continue to reap.

Nationally, degree holders usually out-earn their less educated peers, taking home weekly salaries averaging 64% more ($1,053 compared to $648) than those only possessing a high school diploma. People holding a bachelor’s degree or better also enjoyed a much lower unemployment rate after the 2008 financial crisis.

The 800-Pound Guerrilla Named “Georgia”

For the last 50 years, there has been an inescapable bond between enrollment numbers and college costs.

More students has traditionally meant a need for more faculty and more facilities. This has led to rising tuition, and more student debt. Student loans now average over $23,000 per attendee, and represent a more than $1 trillion liability nationally.

But the ironclad relationship between rising enrollment and increasing tuition is about to be shattered, and traditional institutions like the University of Hawaii may have to adapt quickly, or risk being made obsolete.

Udacity co-founder and Google Glass pioneer, Sebastian Thrun. Courtesy image.

In May of 2012, iconic institutions like Harvard University and the  Massachusetts Institute of Technology announced they would provide classes online for free (without a degree). The demand was staggering, with one Stanford University class netting 100,000 applicants.

Many in the academic community acknowledged these efforts as brave and charitable, but ultimately dismissed them as non-threatening to degree-generating institutions.

But the online-learning revolution has been moving much faster than many would have predicted, fueled by a fiery thirst for knowledge across the developing globe, and funded by tens of millions of dollars from both venture capital and forward-thinking philanthropists.

All of this has been leading up to the inevitable: the collision of a respected university with Silicon Valley-inspired technology. The results could prove both dazzling and destructive.

Last week, Georgia Technical University announced that through a partnership with AT&T and tech-startup Udacity, the university would begin offering an accredited master’s degree in computer science to students online.

Georgia Tech’s computer science program is well-respected, previously enrolling 300 students per year at a total degree cost of $40,000. Faculty at the program expect that by opening up enrollment, the number of trained computer science professionals around the world could be doubled within a decade.

The online program will admit 10,000 new students over the next three years, and requires only a handful of new instructors. The cost of the entire degree? $7,000.

Change or Die?

Georgia Tech’s bold move online represents the first shot fired in what could be a race to the bottom for tuition competition among universities, and UH is no exception.

While the University of Hawaii has been steadily increasing its online offerings over the years, it has traditionally charged the same prices for both in-class and internet-based instruction.

UH Students participate in a distance-learning session. Image courtesy.

For instance, UH-Manoa offers a master of computer science degree online. The cost? More than $16,000.

Apart from the university’s online efforts, is there still value to be had sitting at a desk, surrounded by fellow degree-seekers?

With a student-to-faculty ratio of 13-1, UH-Hilo attendees currently enjoy generous attention from instructors when compared with larger universities. Students also benefit from a higher number of professor-led class sessions than most major institutions, where classes are increasingly taught by graduate students or master-degree-level instructors.

UH-Hilo students often cite easy access to faculty as one of the top benefits of attending  the Big Island campus, but improvements in distance-learning technology are beginning to challenge the notion that larger class sizes mean lower-quality education.

With a heavy presence of tenured PhDs and an ever-increasing campus infrastructure, the UH system could find it difficult to lower tuition once forced to compete with highly discounted online degree programs.

In a future analysis we’ll detail what measures the university is taking to survive the coming revolution in higher learning, and what challenges it faces in trying to adapt.