Despite the increasing number of new students enrolled at the University of Guam the number of credit hours taken per semester is decreasing.

This is an indicator of Guam’s improving economy Dr. Harold L. Allen president of the university told the Journal. While individual student enrollment increased by 8% over the previous semester credit hours have seen a downward pattern since 1999. Credit hours have reduced from 44 353 in 1999 to 33 678 in fall semester 2004.

“When the economy is perceived as growing in a commuter-based student population some percentage of the full-time student population can be expected to shift to part-time attendance ” Allen said. “The reason for the shift is that many students will expand their outside employment hours or go back to work on a part-time basis thereby reducing the amount of time they have available for coursework. If Guam’s economy continues to strengthen the shift will continue to occur.”

The financial implication of decreasing credit hours is minimal Allen said as tuition fees represent a small percentage of the university’s budget. “Tuition revenue is one source of funding for the university. Net tuition and fees represent about 10% of the university’s revenue ” he said. “It is important to note that while the university receives monies from the General Fund we generated $33 million from our own operations per FY 2003 — our most recent audit. This is an increase of $3.2 million over the prior year and for the first time exceeded monies received in government of Guam appropriations.”

For the first time in the university’s history Allen said internally generated revenues exceeded 50% of total revenues. “This points to the success of the university in attracting additional sources of revenue to support strategic priorities. Very few public universities can demonstrate this level of leveraging and success ” he said.

Lower credit hours do affect UOG Allen said. “It results in a loss of some revenue for the year and results in our setting new revenue-generating and enrollment management targets. Internally we have been using a University Budget and Planning Advisory Committee to help weigh funding options and priorities and to be certain that our limited resources are allocated to our highest priorities related to student learning.” However although the university did not reach targeted credit hour revenue projections it did not lose money in 2004 against 2003 as tuition rose from $108 to $118 per credit hour. Gross credit hour tuition revenue rose for fall semester 2004 to $3.97 million compared to $3.7 million for fall 2003.

The university’s limited resources are due in part to a tuition and fee structure that — while increased annually — remains lower than most postsecondary institutions. “It needs to be recognized that the university’s tuition and fee structure is currently 45% lower than the average level charged at our peer institutions in the mainland ” Allen said.

While UOG generated the majority of its operating revenue the university’s budget needs to be increased he said. “Using benchmark comparisons with peer institutions the University of Guam remains significantly underfunded on an annual basis. There is no direct connection between the number of credit hours produced in any given year and the health and welfare of the university ” he said. “To maintain stable academic programs and student support services and the wide variety of functions it performs the university must be able to operate in a stable predictable budget environment from year to year with increases in funding to address escalating costs and inflationary increases.”

According to Allen UOG has not had any significant budgetary increase in years. “The university has operated with essentially a flat budget appropriation for each of the past three years ” he said. “It has fluctuated between about $27 million two years ago to about $25 million for FY04 and FY05. In each of these budget years we have identified for the legislature and the governor our highest priorities and how these budget priorities relate to student learning and meeting the university’s mission. We’ve also emphasized what level of funding we have leveraged through federal grants and contracts and the multiplier effect of our local appropriation.”

Allen said the university had been leveraging monies it received from the General Fund into additional grants contracts and services. “For every dollar the university receives it leverages another $1.10 in grants and contracts. The answer is not to reduce our budget but rather to increase it. The university provides a high level of return on a modest local investment.

“The University of Guam over three short years has reinvented itself into a high-performance university ” he said. “The overall financial condition of the university improved significantly as net assets increased by $2.5 million from $73.7 million in 2002 to $76.2 million in 2003. Grants and contracts from the federal government and others increased by $2 million or 12% compared to the prior year and investments showed a gain of $1.4 million.”

Allen said. “The university’s credit hour production will increase over time. However increasing credit hour production is far less important that focusing on quality academic program enhancement and serving a focused mission. Those who can identify growing economies or growing regions of the U.S. mainland know that public universities play a vital role. More than 96% of the country’s college graduates come from public universities. I believe it’s a strong message.” MBJ