How the U. of Puerto Rico Plans to Ride Out a Fiscal Storm


The 11-campus University of Puerto Rico system occupies a distinct place in American higher education, enjoying an unrivaled level of public support and now facing an unprecedented financial crisis.

Whereas the states treat higher-education appropriations as discretionary, the Commonwealth of Puerto Rico has a law guaranteeing its university system a fixed share of the island’s tax revenue. Compared with its mainland counterparts, the system spends more, and employs more people, per each of its nearly 62,000 students. It also charges much lower tuition, with resident undergraduates paying just over $2,000 per year in tuition and fees.

Although the island’s unemployment and poverty rates are more than double the national averages, its residents earn bachelor’s degrees at nearly twice the rate of stateside Puerto Ricans, and its university system ranks as one of the nation’s top producers of Hispanic doctorate recipients.

The forecast for the University of Puerto Rico looks stormy, however, as a result of a financial crisis that has left the commonwealth more than $70 billion in debt and recently prompted Standard and Poor’s to lower the university system’s bond rating to CCC-, signaling imminent default.

The system has a long history of sometimes-violent unrest when it has sought to trim expenditures or to ask students to shoulder a larger share of their education costs. Proposals to raise tuition in response to budget gaps prompted major student strikes in 2005, 2010, and 2011, with the latter protests leading to a police takeover of the system’s main campus and the resignation of its president.

On Friday, The Chronicle asked the system’s current president, Uroyoán Walker Ramos, how it is dealing with the current fiscal crisis. Following is an edited and condensed version of the interview.

Q. What impact is Puerto Rico’s budget crisis having, or likely to have, on the university system?

A. Right now the university’s budget, or the money that comes in from the government, has been frozen for the last two years, and it will be frozen for the next year as well. So we are dealing with a frozen budget, which has its challenges, but it also has its opportunities to redistribute our money according to different priorities.

Q. Have you been involved in any discussions with Puerto Rico’s governor or other lawmakers about the commonwealth’s debt load?

A. The University of Puerto Rico has a responsibility to the people of Puerto Rico, and we have been talking to several people at different levels. We have talked to the governor as well as the presidents of both the House of Representatives and Senate of Puerto Rico. We have talked to heads of different local governmental agencies, and the university has put at everybody’s disposal our human resources, our human capital, which we believe will be key to turning things around for Puerto Rico.

Q. Do you anticipate any long-term changes in how the university system is financed?

A. The University of Puerto Rico since 1966 has had a formula which brings in money from our local fiscal agencies. Right now that is 9.6 percent of the average of the previous two years’ collections. So it is a very generous investment that the people of Puerto Rico make in its university, fully convinced of its value and that this is the best investment that the government can make for its people.

When we have, thanks to a strong and committed university, people that are prepared and competitive in a world context, we will be successful in turning things around for Puerto Rico.

Q. Will you be able to sustain current tuition levels, or will you need to raise them?

A. Right now the tuition level has been frozen. It has been frozen for the past two years. It is very low tuition, as you know … That is only possible because of the people of Puerto Rico’s investment in its university.

Q. What other potential revenue sources are out there?

A. Right now we are working closely with industry. Today, on the 24th of July, the governor is announcing the opening of the Lufthansa Technik’s MRO [maintenance, repair, and overhaul] operations in the Aguadilla airport. There in partnership with Lufthansa were are implementing though our Aguadilla campus … the German apprenticeship model for the preparation of engineers and aviation mechanics that will supply the human capital for the MRO … Already some of our students have gone through the preparation to start work on the first day.

Q. Will you be able to maintain the system’s current administrative structure, with chancellors for each campus?

A. The restructuring of the university to better respond to our current and future needs needs to be looked at. We have been looking, and we have been in some conversations with — and reading about — the system at Arizona State University, which is a system of less units … and looking at that new American model for a university that ASU’s president presents for the future.

Q. Where do you see yourself needing to make spending cuts? Will the system need to reduce the size of its work force?

A. Right now we are looking for avenues of opportunity where we can reduce costs but also increase revenues. I talked to you about the German apprenticeship model that we have instituted at the Institute for Aeronautics and Aerospace of Puerto Rico … We have a cancer center whose hospital will open this next summer, the summer of 2016 … We are also working with an HIV vaccine which is sponsored by the NIH. We are very hopeful that those initiatives will bring new revenues to the university.

I have been pushing since the day I was put as the president of the University of Puerto Rico for a strong entrepreneurship model for our students. I believe that if we can instill in our culture, in the culture of our students and our work force, the desire and the internal need for, or the internal drive of, entrepreneurship, we will be successful in changing the mind-set of public dependency that most people have here.

Q. Given the past political unrest on your campuses, are you worried about how faculty members and students will respond to efforts to improve the system’s financial condition?

A. Any change, as is human nature, will have resistance. What needs to be clear is that the operation, as has been done up to this point, has to change. If one thing is true in our human history, it is that the only thing that has brought progress to any people has been change. So we are committed to changing our university system for the better.

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