Hammond tours Kansas: President explains how FHSU increases in growth, efficiency answered a previous drop in financial support from the state

As institutions of higher education across America brace for the impact of the current economic downturn, Dr. Edward H. Hammond, president of Fort Hays State University, explained how his university implemented successful strategies eight years ago to deal with declining financial aid from the state.

The economic slump that began in the year 2000 led to a reduction in state financial aid for the six universities in the Kansas Board of Regents system. FHSU responded by increasing enrollment and putting several efficiencies into effect. President Hammond said those strategies lowered operational costs and allowed the university to keep tuition and fees reasonable for its students.  

The president said it was widely known that FHSU had kept tuition and fees low over the past several years by pursuing an extremely successful growth strategy. From a headcount of 5,506 students on the official 20th day in fall 2000, enrollment has grown to 10,107 by the official 20th day of the current semester -- a growth rate this century of an amazing 84 percent. FHSU has been far and away the fastest growing four-year institution of higher learning in Kansas during that period.

"Just like a business facing economic challenges, we knew that we had two choices," President Hammond said. "We could charge our students more or we could serve more students. We opted to increase our enrollment so that we could hold down the cost of tuition and fees for individual students by serving a larger student body."

The result has been dramatic. FHSU already offered the lowest tuition and fees in Kansas in the year 2000, and statistics provided by the Regents office show that the gap has widened over the intervening years. Tuition and fees for an undergraduate, resident student this year are $1,678 at FHSU, which is $285 less than the next lowest Regents university and $1,622 less than the highest-priced Regents university.

In addition to growth, FHSU has implemented several efficiencies in order to hold down operational costs. "We measure how much it costs us to produce a credit hour of instruction, which would be comparable to a business calculating what it costs to produce each of its 'widgets,'" he explained. "From fiscal year 2002 to fiscal year 2007, we have reduced the cost of producing a credit hour by 4.2 percent, from $249 down to $238. Meanwhile, other universities have seen increases in their costs." The president said FHSU had actually accomplished the remarkable feat of reducing its cost of producing a credit hour for three consecutive years -- from FY2002 to FY2003, from FY2003 to FY2004, and again from FY2004 to FY2005.

President Hammond gave several examples of the efficiencies that have reduced costs at FHSU. "We saved $73,000 on paper and postage just by moving enrollment and grades to a completely on-line system," he said. "Over the last 10 years, our retention rate for freshmen has increased from 67 percent to 73 percent, which leverages into savings in our recruitment efforts. We develop courses in-house for our Virtual College at a cost of $3,000 to $12,000, compared to $50,000 per course at other universities, which represents a savings of more than $1 million a year. We realized a savings of $875,000 a year by developing our Student Record System in-house. By installing generators to produce our own electricity during peak-demand hours, we have seen a net savings of $773,854 a year on energy costs."

The president said that changes in internal operations also lowered production costs. "Elimination of the Special Education Department and the Accounting and Information Systems Department during the recent academic reorganization saved us another $305,670 a year," he said. In addition, he said FHSU saved $2,403,000 over the past decade by using its excellent in-house construction crews instead of contractors on various building renovation projects.

"The numerous efficiencies implemented at FHSU have been critical in allowing the university to fulfill our educational mission despite the necessary belt-tightening by the state," President Hammond said.

From FY2002 to FY2007, the most recent period for which statistics are available from the Regents, there has been a significant decline in financial support from the state. In FY2002, FHSU depended on tuition for just 22.5 percent of its educational costs. By FY2007, the tuition paid by students was supporting 36.1 percent of the costs. "We went from students paying less than a quarter of the cost to students paying more than a third of the cost in just five years," President Hammond said.

The current financial crisis is creating new challenges.

"We're facing another slump, but a recent survey shows that Kansans do not support further cuts in state support for higher education," he said. "They recognize that higher education is more critical than ever to their future and the future of their children. At FHSU, we will continue to grow and we will find new ways to be efficient, but we can't afford further cuts in state funding."

President Hammond discussed the implications of the troubled economy for his university and for all of higher education at a news conference today on the university campus. He will carry the message across the state of Kansas this week on his annual media tour, visiting in 17 cities at newspapers, radio and TV stations, and with community leaders, alumni and friends of the university.

Besides Hays, the 2008 media tour includes stops in Dodge City, Liberal, Garden City, Scott City, Goodland, Norton, Colby, Hutchinson, Salina, Great Bend, Clay Center, Topeka, Overland Park, Kansas City, Kan., Kansas City, Mo., and Wichita.

The president will be accompanied on his annual media tour by Debra Prideaux, director of the Alumni Association and Governmental Relations; Kent Steward, director of University Relations; and Dr. Tisa Mason, FHSU's new vice president of Student Affairs.

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Office of University Relations   |  600 Park Street   |  Hays, KS  67601-4099
(785) 628-4206   |   Fax (785) 628-4152
Kent Steward, Director   |  ksteward@fhsu.edu  |  Kurt Beyers, Assistant Director   |  kbeyers@fhsu.edu