1. 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
UNESCO Bangkok
Asia and Pacific Regional Bureau for Education
Macao SAR, PR China September 2008

2. 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

3. 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

4. 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

5. 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:
Higher education is development
Tilak/Financing Higher Education Asia Pacific, Macao Sept 2008

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

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

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

9. 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

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

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

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

13. 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

14. 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

15. Economic development may not necessarily determine development of higher education
r between GER and GNP p/c (PPP):
But GNP does not necessarily determine GER:
GER(2006) GNP/pc (2006)
Hong Kong ,320
Malaysia ,160
Kazakhstan ,700
Mongolia ,810
Kyrgyzstan ,790
Tajikistan ,560
Cambodia ,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

16. 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

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

18. 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

19. 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

20. 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

21. 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

22. 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

23. 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

24. 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

25. 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

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