While University of Hawaii tuition has become more affordable over the past 10 years when adjusted for inflation, and the financial benefits of a degree remain strong, college enrollment rates among Hawaii public school graduates have declined since the COVID-19 pandemic, with about 500 fewer entering higher education each year, a new report says.
Still, the University of Hawaii Economic Research Organization analysis of college graduates’ earnings asserts that a UH college degree continues to be financially beneficial.
“A degree from the University of Hawaii system raises wages,” the UHERO report said. “These positive effects are evident starting five years after graduation. Furthermore, a college degree increases intergenerational mobility. In other words, a degree from the University of Hawaii system reduces the labor market obstacles that those from poorer households face.”
Rachel Inafuku, UHERO research economist and one of the report authors, said in a statement that “the main takeaway is that despite this narrative at the national level that college degrees aren’t a worthwhile investment, we’re finding that specifically from the University of Hawaii campuses, a college degree is definitely a worthwhile investment.”
Among the report’s main findings:
>> Lifetime earnings for bachelor’s degree holders are projected at $2.8 million — 27% higher than earnings for those who exited their program without a degree.
>> Lifetime earnings for holders of Associate of Science and Associate of Applied Science degrees are calculated at $2.7 million — 22% higher than earnings for those who left the program without a degree.
>> While immediately after graduation there is little difference in wages between those who have certificates and those who don’t, nine years after graduation, certificate holders earn 33% more than people with similar demographic characteristics who left college without completing their program.
“For students from lower socioeconomic households, a degree from the UH reduces obstacles in the labor market and improves economic mobility across generations,” the report added.
UH tuition freeze
The report, titled “Estimating the Returns to Higher Education Using Administrative Data: A Case Study of the University of Hawai‘i System,” was produced by Inafuku and Timothy Halliday, a UH professor of economics and UHERO research fellow.
The report examined how wages were affected by earning a professional certificate, associate degree or bachelor’s degree from a college within the UH system. Earnings were examined at one, three, five, seven and nine years after graduation, and data from students who have and do not have a degree were compared. Lifetime earnings were projected, and college costs and lost wages during school were considered, to determine an “internal rate of return.”
The researchers looked at students receiving Pell Grants, which they said may be considered a proxy for lower socioeconomic status. Such students typically encounter extra obstacles in the labor market, resulting in a “wage penalty” of 12% to 15%, said the report.
However, the data indicates that “obtaining a college degree not only mitigates but potentially eliminates this wage penalty altogether, suggesting that college completion significantly boosts economic mobility,” the report said.
While in-state tuition at UH campuses increased by 20% to 24% in nominal terms over the past decade, when adjusted for inflation, tuition for residents at UH Manoa and the community colleges actually decreased by 3% and, at UH Hilo and UH West Oahu, decreased by 5%, “enhancing affordability for residents,” the report said.
Expressed in 2022 dollars, UH Manoa tuition was $11,382 in the 2013-2014 school year and fell to $11,035 in 2023-2024, the report said.
While the report did not offer national tuition figures for the identical time period, it said tuition at ranked public universities in the U.S. has risen by 158% since 2004; when adjusted for inflation, the increase amounts to 60%. However, increases slowed dramatically in the past decade, rising just 0.3% during that span of time, the report said.
A UH tuition freeze currently is in effect, with a 2% increase at UH Manoa, UH Hilo and UH West Oahu scheduled for fall 2026 and fall 2027.
UH Vice President for Academic Strategy Debora Halbert said in a statement that “our mission is to provide a quality higher education to the people of Hawaii, and the key is keeping it affordable. One of the things that we’ve really tried to do over the past few years is to ensure that our tuition isn’t increasing at the same rate as other states have seen their tuition increase.”
Enrollment dropping
Hawaii public school students historically have enrolled in community colleges and four-year universities at a lower rate than the national average, the report said. In 2019, 55% of Hawaii’s public high school graduates enrolled in college, compared with the national rate of 66%.
The pandemic worsened the numbers. After the pandemic the U.S. college enrollment rate fell by 4 percentage points, to 62%. In Hawaii it fell by 5 percentage points. “The Hawaii public school college entrance rate currently sits at 51% — the lowest point since 2010. This equates to roughly 500 fewer public school graduates entering college per year compared to the pre-COVID era,” the report said.
Among the factors may be ripple effects from pandemic lockdowns, poorer high school performance, and a tight labor market that created high need and a greater incentive for young people to delay or forgo college, the report said. “It is possible that the perceived value of a college degree has decreased. Some students may have believed that job experience would produce greater returns and fewer costs than higher education,” the report added.
The UH administration in a news release Tuesday used the report’s release to reiterate a call for lawmakers to expand the Hawai‘i Promise scholarship program for Hawaii public school graduates.
Hawai‘i Promise is a “last dollar” scholarship that provides money from UH and the state to cover direct education costs — including tuition, fees and an allowance for books and supplies — that are not met by other forms of financial aid. More than 2,220 students from seven UH community colleges benefited from almost $5 million in Hawai‘i Promise scholarships in school year 2021-2022, a UH website said.
The UH Board of Regents had requested more than $22 million in its supplemental budget request to expand Hawai‘i Promise to students attending UH’s four-year campuses, but Gov. Josh Green included only $3.7 million in his budget proposal to the state Legislature.
