Financing Higher Education in Asia-Pacific Asia-Pacific Sub-regional Preparatory Conference for the 2009 World Conference on Higher Education Financing Higher Education in Asia-Pacific Jandhyala B G Tilak National University of Educational Planning & Administration, New Delhi, INDIA Email: jtilak@vsnl.com UNESCO Bangkok Asia and Pacific Regional Bureau for Education Macao SAR, PR China 24-26 September 2008

The crisis in higher education Financial aspects are a part of the crisis Non-provision of adequate finances are a cause of the crisis Recent financing policies aggravate the crisis Overall neglect of higher education Tilak/Financing Higher Education Asia Pacific, Macao Sept 2008

Why public finance for higher education? Public good Merit good Human right It contributes to development It is development Tilak/Financing Higher Education Asia Pacific, Macao Sept 2008

Why more finances for higher education? To expand higher education The present level of enrolment ratios in many countries are too low to be sufficient for sustainable development To expand equitable education Current levels of inequalities are high --regional, gender and by socioeconomic groups To improve quality and excellence in higher education For higher education to contribute to development Tilak/Financing Higher Education Asia Pacific, Macao Sept 2008

Higher education and development Higher education contributes to development economic growth poverty reduction income distribution technological advancement Higher Education is related to Human Development r between GER and HDI: 0.821 Higher education is development Tilak/Financing Higher Education Asia Pacific, Macao Sept 2008

Current Status of Higher Education in Asia Pacific Tilak/Financing Higher Education Asia Pacific, Macao Sept 2008

Enrolment ratio in higher education, 2006 16 countries < 40% Ten countries < 20% Tilak/Financing Higher Education Asia Pacific, Macao Sept 2008

National priority for higher education Tilak/Financing Higher Education Asia Pacific, Macao Sept 2008

Tilak/Financing Higher Education Asia Pacific, Macao Sept 2008 Expenditure per student in tertiary education (as % of GDP per capita), 2006 Tilak/Financing Higher Education Asia Pacific, Macao Sept 2008

Tilak/Financing Higher Education Asia Pacific, Macao Sept 2008 Expenditure on tertiary education as % of total expenditure on education, 2002-05 Tilak/Financing Higher Education Asia Pacific, Macao Sept 2008

Disturbing Trends in Higher Education Tilak/Financing Higher Education Asia Pacific, Macao Sept 2008

Declining public expenditure on higher education Increase in a few countries Decline in many countries Tilak/Financing Higher Education Asia Pacific, Macao Sept 2008

Tilak/Financing Higher Education Asia Pacific, Macao Sept 2008 Disturbing trends …2 Increase in inequalities in public expenditure on higher education between countries and within countries Deep Development or Deep Division? (Anthony Welch & Ka-ho Mok) State Policies Tilak/Financing Higher Education Asia Pacific, Macao Sept 2008

Changing State policies Priority for higher education Student fees Student loans Privatisation of higher education Corporatization of universities International trade in higher education Tilak/Financing Higher Education Asia Pacific, Macao Sept 2008

Economic development may not necessarily determine development of higher education r between GER and GNP p/c (PPP): 0.6814 But GNP does not necessarily determine GER: GER(2006) GNP/pc (2006) Hong Kong 33 39,320 Malaysia 31 12,160 Kazakhstan 51 8,700 Mongolia 47 2,810 Kyrgyzstan 43 1,790 Tajikistan 19 1,560 Cambodia 5 1,550 It is not lack of resources, but other factors influence national priority for education. Priorities … Tilak/Financing Higher Education Asia Pacific, Macao Sept 2008

Tilak/Financing Higher Education Asia Pacific, Macao Sept 2008 Student fee Introduction of tuition fees in higher education Steep increases in fees High levels of fees for various items Higher levels of fees for overseas students Tilak/Financing Higher Education Asia Pacific, Macao Sept 2008

Cost recovery in public higher education (Fee as % of recurring costs) Developed Countries France 4.7 UK 6.4 Japan 9.8 Canada 12.0 Netherlands 12.0 USA 15.1 (Range: 0-15%) South Korea 49.6 (exception) Developing Asia-Pacific Countries Thailand >20.0 Indonesia >20.0 Vietnam >20.0 Hong Kong 18.0 China > 17.0 India 15.0 (Range: ~50%) Tilak/Financing Higher Education Asia Pacific, Macao Sept 2008

Tilak/Financing Higher Education Asia Pacific, Macao Sept 2008 Student loans Increasing reliance on student loans as an effective method of financing higher education Reforms of Loans Replacement of Government-subsidised loan schemes by commercial bank-operated schemes High rates of interest Reduction in subsidies No difference between educational loans and other loans Income Contingent loans Loans as a substitute to scholarships Tilak/Financing Higher Education Asia Pacific, Macao Sept 2008

Tilak/Financing Higher Education Asia Pacific, Macao Sept 2008 Student loans Limited in number Accentuation of commercialisation of higher education Further Increase in student fees Restricting access and Increase in inequities Shifting of responsibility to the individual domain Tilak/Financing Higher Education Asia Pacific, Macao Sept 2008

Privatisation of higher education Decline in philanthropy Increase in for-profit institutions of higher education Least regulated by government Negligible expenditure on scholarships Negligible or nil expenditure on research Undesirable/questionable practices Trends towards vulgar forms of commercialization Flourishing of commercially viable disciplines and neglect of scholarly disciplines Higher education in developing countries is more privatized than in developed countries Tilak/Financing Higher Education Asia Pacific, Macao Sept 2008

Corporatization of universities Universities can borrow money from markets participate in share markets (Invest & sell) set up companies invest the profits in the university education Less reliance on public funds Towards privatisation of the universities Tilak/Financing Higher Education Asia Pacific, Macao Sept 2008

Internationalisation of higher education Export of higher education Higher levels of fees for overseas students Set up institutions in other countries to raise resources Offer on-line programmes and raise resources without much investment Internationalisation primarily for raising resources, and not for academic purposes Tilak/Financing Higher Education Asia Pacific, Macao Sept 2008

Tilak/Financing Higher Education Asia Pacific, Macao Sept 2008 To sum up Decline in public investment in education Increase in student fees Reform in Student loans More efforts to raise consultancy, etc Expansion of distance education programmes New forms of export of higher education Others/less controversial/less cared for Improvement in the utilisation of resources Performance based funding Universal welfare entitlement to private investment – Michael Peters (NZ) Tilak/Financing Higher Education Asia Pacific, Macao Sept 2008

Tilak/Financing Higher Education Asia Pacific, Macao Sept 2008 Conclusions Cost Recovery rates in higher education are already fairly high in many countries of the region Modest increases in cost recovery are possible, but not significant increases Other (non-government and non-student) sources of income are negligible and unreliable; They can only be supplementary Tilak/Financing Higher Education Asia Pacific, Macao Sept 2008

Tilak/Financing Higher Education Asia Pacific, Macao Sept 2008 Conclusions .. Cont’d Private education and corporatization may produce serious adverse effects on equity and development Export of higher education is not the best method of raising resources STATE SUBSIDISATION OF HIGHER EDUCATION IS IMPORTANT It is the best practice in most countries. Tilak/Financing Higher Education Asia Pacific, Macao Sept 2008

Tilak/Financing Higher Education Asia Pacific, Macao Sept 2008 Thank you Tilak/Financing Higher Education Asia Pacific, Macao Sept 2008