The Carnegie Foundation named UH a Tier One research institution in January of this year.
But Dr. Renu Khator told the assembly the university's quest for Tier One status is not done.
"Retention and graduation rates have increased. But they still lag behind the national and state averages. According to the U.S. News and World Report and based on our freshmen profile, our graduation rate should be 53 percent. But it is only 46 percent. This seven percent gap is sufficient to keep us from getting into the Tier One of U.S. News and World Report ranking."
Khator says if UH wants to be credible, they must increase the graduation rate as soon as possible. And she says the university faces more financial challenges in the coming months.
Earlier this year the Texas Legislature slashed state funding for UH by $70 million and the cuts may not be over.
"Even the most optimistic predict that the state budget will see another very serious shortfall in 2013. Our student success and Tier One goals are non-negotiable. So the only way to succeed in the future for us, is to embrace a new business model. A model that awards performance, promotes excellence, encourages innovation and diversifies revenue."
Khator says to that end, UH will aggressively compete for research grants, implement performance-based raises to retain top talent and develop an annual fundraising portfolio of $100 million a year in private donations.