Southern Oregon University completed a deal this week with Henan University in China to begin sending students to Ashland to study hospitality management in the fall of next year — and to have SOU faculty members teach at the university in China.

The arrangement, signed Tuesday, was announced by SOU President Mary Cullinan at her State of the University speech Thursday at Stevenson Union.

The Henan University agreement is a "two-plus-two" program, in which students from China, a small number at first, will study for two years at SOU, providing much-needed tuition revenue and "spreading out like seed corn" in China to pass the word about SOU, Provost Jim Klein said in an interview.

SOU also is applying for a Confucius Institute authorization from the Chinese government, a program already in place at the University of Oregon and Portland State University, to help fund the teaching of Mandarin on the Ashland campus. The "Confucius classroom" is already operating at St. Mary's School in Medford.

Cullinan, after counting the successes of SOU in trying times, told a crowd of several hundred that, "for a sustainable future, we can't keep cutting; we have to work on revenue." "We're losing people with a lot of years of dedication and commitment," she said.

In reviewing the school's strategic plan, Cullinan noted progress in academic quality, the arts and community partners but said "financial sustainability is the tough one."

"We've done a lot of work over the past year," she said. "We were in pretty good shape (last year) and economic chaos came to the whole world." Cullinan thanked the SOU faculty and staff for their sacrifices through "a difficult " ... a horrible time."

She added, "We're not alone in our losses. Businesses in the Rogue Valley have lost a third to a half of their work force. We have a lot to do to get back on our feet."

In this fall term, Cullinan said, SOU has made "extraordinary progress against extreme challenges," with the entering fall class having the highest grade point average, the highest SAT scores and the most diversity in the school's history.

In the past year, she said, SOU has set up a degree-completion program in business with Southwestern Oregon Community College in Coos Bay, seen professors publish new books, started a film acting minor and created a LEED-platinum solar collector energy system on the new Higher Education Center in Medford.

SOU hopes to meet campus greenhouse gas reduction goals, she said, and get its campus master plan — which ran into rough sledding with the City Council a few months ago — approved by the city.

Cullinan said SOU's plan for recruitment and retention is showing results, with more than 500 Californians attracted for fall enrollment. She noted progress in online classes, with undergraduate classes up by 34 percent from last year and graduate classes up 80 percent.