In 2004, the College Board published "Education Pays: The Benefits of Higher Education for Individuals and Society."

This report discusses the economic benefits that accrue to society from an educated populace: increased tax revenues, greater productivity, increased consumption, increased workforce availability and flexibility, and decreased reliance on government financial support.

Social benefits include reduced crime rates, increased quality of civic life, and higher levels of civic participation including volunteer work, voting and even blood donation.

"The Investment Payoff" (2005), published by the Institute for Higher Education Policy, quantifies some of these benefits by individual states.

For example, in Hawai'i, the likelihood of a person with a bachelor's degree to report ever volunteering for or through an organization is 73 percent greater than a person with a high school diploma. Similarly, in Hawai'i, the likelihood of a person with a bachelor's degree to have voted in the November 2000 election was 77.7 percent greater than a person with a high school diploma.

Historically, resident UH undergrads have paid tuition that covered a smaller share of the cost of their education than students in most states, UH says. Proposed increases would increase their share. Advertiser library photo • Oct. 18, 2000

Including earnings and the cost of the education, for every dollar invested to achieve a bachelor's degree, the return to the individual is $15. For every dollar invested to achieve an advanced degree, the return to the individual is $16.50.

Individuals also benefit from the fact that the higher the level of educational attainment, the less likely an individual is to be unemployed. For example, in Hawai'i, the likelihood of a person with a bachelor's degree being unemployed in March 2004 was 67.7 percent less than a person with a high school diploma.

Other social benefits to the individual are less tangible, but include personal and professional mobility, improved health, higher savings levels, better consumer decision-making, and improved quality of life for children.

Given the clear benefits to both society and the individual, it's fair to ask: "Who pays for higher education?"

Although the state bears full responsibility for funding K-12 education for every child living in the state, the responsibility of paying for post-secondary education is shared between the state and the individual. In Hawai'i, there is a long-standing tradition of strong support from the Legislature that has resulted in tuition rates that are among the lowest in the nation.

The reliance on tuition as a percentage of total funding (that is, appropriations plus tuition) varies by state. In fiscal year 2003, the average reliance on tuition revenues as a share of total funding across the 50 states was 32 percent; that is, on average, the state subsidized 68 percent of the total funding.

In Hawai'i, tuition revenues were 15 percent of total funding, and state taxpayers subsidized 85 percent of the total funding, demonstrating that we have relied more on state appropriations and less on tuition to fund higher education than most states.

The fiscal demands on every state have increased. Healthcare, corrections and K-12 education are taking greater shares of the available resources. As a result, in most states, tuition rates have increased as a result of the decrease in state appropriations per student.

In other words, the cost share borne by students and their families for higher education is increasing.

The share of the cost of education covered by tuition is calculated by summing the expenditures specific to instruction (i.e., excluding costs of research, service and capital improvements).

For example, in fiscal year 2003, the tuition charged to UH-Manoa resident undergraduates covered 29 percent of the cost of their education, and the state subsidized the remaining 71 percent of the cost. At the community colleges, tuition covered 14 percent of the cost of education charged to residents, and the state subsidy was 86 percent.

The proposed UH tuition schedule for 2006-07 to 2010-11 increases the share of the cost borne by students and their families.

(By 2010, UH-Manoa tuition will cover 44 percent of the cost of the education for resident undergraduates, and the state subsidy will be 56 percent. At the community colleges, tuition in 2010 will cover 23 percent of the cost of education for residents, and the state subsidy will cover the rest.)

Although it is clear that students and their families will bear a greater share of the cost than in the past, it is equally clear that the state's taxpayers will continue to heavily subsidize the cost of education.

The answer to the question of "who should pay for higher education?" is a matter of social policy and debate.

After a yearlong process of identifying the resources UH needs to provide a quality education to our students, and after consultation with the university's biennium budget group (which includes students and faculty representatives as well as campus leaders and UH system officials), the university has put forward the proposal to increase tuition.

The Legislature and the executive branch will determine the share of state revenues to be allocated to higher education in the next biennium budget, given the competing demands on the state's resources.

The Board of Regents, whose responsibility is the fiscal health of the university, will in turn determine the share of the cost that must be borne by students and their families through tuition to ensure that the university can meet its missions of access and quality.