Faced with mounting financial problems and the threat of losing its accreditation, TransPacific Hawaii College will shut down operations at its East Honolulu campus next spring.

School officials posted the announcement on the college's Web site Monday and said the college, formerly known as Kansai Gaidai Hawaii College, will close March 31.

TransPacific Hawaii College is on oceanfront property along Kalaniana'ole Highway in 'Aina Haina and caters to students from Japan.

The school offers two-year associates of arts degrees and has an enrollment of about 80. At its peak, the school had more than 260 students.

Shungo Kawanishi, TransPacific interim president, said economic conditions in Japan and a change in focus among Japanese students have led to the drop in enrollment. Unlike most colleges and universities that rely on large endowments or public funding, TransPacific Hawaii is funded entirely by tuition.

Tuition at the school is $4,500 per session, and it takes six sessions to earn a degree.

"The students wishing to enter two-year colleges in Japan are dwindling very much because of the number of children decreasing per family," Kawanishi said. "All of the universities and two-year colleges in Japan are facing the same problem."

Kawanishi said the high cost of living in Hawai'i has led to Japanese students going elsewhere for their education.

"Many college towns on the Mainland offer less than half the living costs. So in that sense, we also have competition not in our favor," he said.

The college's accreditation status also was a deciding factor to close the school, Kawanishi said. The Accrediting Commission for Community and Junior Colleges of the Western Association of Schools and Colleges had placed the college on a "show cause" status and gave officials until October 15 to meet recommendations in an ACCJC report.

Rachel Fukumoto, TransPacific Hawaii chief financial officer, said the accreditation committee was critical of the way the school's board of trustees operated.

Until recently, the college's board consisted of a mother and son from Kansai Gaidai University in Japan and a third person who worked at the college. Fukumoto said the committee felt there wasn't adequate oversight of the college.

"The other problem was they haven't been here in three years," Fukumoto said of the trustees. "They're supposed to have an annual meeting on the campus at minimum once a year, but that hasn't happened."

Derek Otsuji, an adjunct instructor, said many faculty members have tried to come up with proposals to save the school, but said their attempts have been rejected by the trustees.

"It's not like the teachers here have not wanted to come up with proposals and suggestions on how we could get grant money or outside funding," Otsuji said. "It's that anything that we started has been pretty much smacked down by the board."

Otsuji said he's concerned about the students who will not be able to complete their degrees. He said many have already transferred to other institutions and others are being encouraged by the school to switch schools before March 31.

"I feel students' interests are not being represented," he said.

But Kawanishi said the school is doing everything it can to help these students. He said arrangements have been made for second-year students to earn more credits in a shorter period to allow them to graduate.

Kawanishi said the school also is helping freshmen students transfer to two- or four-year institutions.

TransPacific Hawaii employs about 50 people, including 25 full-time faculty and staff, who will be laid off by March 31. In addition to the loss of jobs, Fukumoto said, the East Honolulu community will also feel an economic impact.

"At full enrollment we have about 260 students who all stay with host families and they pay them anywhere from $700 to $900 a month. Those students also are buying food and everything else, and the tuition that they pay employed at one time 80 different people," Fukumoto said. "It's not going to be huge like Aloha Airlines, but it is going to affect the East O'ahu community because all of our students stayed with home-stay families and provided them with additional income. So that's going to be really sad."

The school was founded in 1977 as Kansai Gaidai Hawaii College, a branch of Kansai Gaidai University in Osaka, Japan. The school's name was changed in 1998 to TransPacific Hawaii College.

Staff writer Kelli Miura contributed to this report.