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Equity and HE funding in Slovenia

Dušan Lesjak, ISSBS

Duša Marjetič, MHEST

Rijeka, 15. 3. 2011

TEMPUS ACCESS

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Public funding of HE

• Students are considered to be financially dependent on their parents.

• No tuition fee for full-time students at 1. and 2. cycle.

• Full time students and part time students, who are not employed or registered as unemployed also benefit from health insurance, subsidised nutrition, subsidised rent in student dormitories / private accomodation and travel subsidies.

• Scholarships (2009): materially deprived students (56%), talented and gifted students (28%), company scholarships (15%).

• Indirectly additional benefits are guaranteed for parents and students through tax benefits and tax relief on student’ work.

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Transfers and payment to households include all scholarships and child benefits.

Transfers to other private entities include subsidies to transport enterprises, subsides for textbooks, professional literature, etc.

Total expenditure of TE

Scholarships in TE

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23% of enrolled students received a scholarship (26.913 out of 114.873) in 2009.

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Student aid (cont.)

Subsides for rent of student husing – a case of Student dormitory in Ljubljana:• average noneconomic rent per month: 66.21 EUR• average economic rent per month: 148.33 EUR

(Students pay noneconomic rent, public contribution is a bit more than 15 EUR or aprox. 30 – 40 EUR, if it is a private accommodation.)

Travel subsides is form 17% – 70% price of transportation, depending on economic status of parents and the distance from the HEIs.

Subsided nutrition – student lunch is 2,62 EUR; per day a student can use maxium 2 subsidies (at least 4 hours in between).

6© D. Lesjak

Universities

Faculties

Private

Private - publicly funded

Public

HE Geographically

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health insurance, subsidised nutrition, subsidised rent in student dormitories, travel subsidies, scholarships

HEIs Student support

MHEST

Slovenian Research Agency

MLFSA

Teaching Research

Slovenian Human Resource

Development and Scholarship

Fund

Other(SUOSWC…)

Other

Financing of HE

SUO - student union organisationSWC - social walefare centre

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Public funds for education (2007)

ISCED 0: preschool, ISCED 1: basic, ISCED 2-4: upper secondary, ISCED 5-6: TE

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GDP % for TE (2007)

10

% of public expenditure for TE students aid (2007)

1111

Public expenditure per TE student in EUR PPS

(2007)

1212

OECD recommendation

We have recently got the answer from the OECD to the question

of whether Slovenia allocates sufficient (public) funds to HE.

They highlighted the:

• low efficiency of spending funds in primary education and

the

• need to introduce tuition fees (in combination with student

loans) in higher education.

Source: OECD Economic Survey, Slovenia, Overview, February 2011.

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Budget for HE in 2010

(289 mio EUR)

2,7%

90,8%

1,8% 4,7%

Investments in higer education

Higher education

Subsidies for student accomodation, transport

Investments in dormitories

Source: MHEST – first figures for 2010

1414

Funding of TE

1515

HE students and funds

Year 2003 2004 2005 2006 2007 2008 2009 2010

Academic year 2002/3 2003/4 2004/5 2005/6 2006/7 2007/8 2008/9 2009/10

Students

(1. cycle)

49.818 50.568 51.873 52.462 53.229 53.848 52.679 52.803

Students

(2. cycle)

- - - - 112 675 1.685 3.635

Students (all) 49.818 50.568 51.873 52.462 53.341 54.523 54.364 56.438

Graduates 7.460 7.789 7.585 7.845 8.048 8.150 8.105 8.098

EUR/students 3.228 3.445 3.574 3.725 3.781 4.058 4.670 4.455

Source: MHEST

1616

Funds for teaching

Source: MHEST

yearFixed funds

Var. funds

Deve-lop. etc.

2. cycle

Addit. funds

All fundsAnn. incr. (in %)

GDP real growth(in %)

GDP nom. growth (in %)

Infla-tion

(in %)

2003           160,8        

2004 138,7 34,4 0,4 - 0,7 174,2 8,3 4,3 5,4 3,6

2005 143,8 39,1 2,6 - - 185,5 6,5 4,5 6,0 2,5

2006 146,8 45,3 3,3 - - 195,4 5,4 5,8 8,0 2,5

2007 131,0 67,8 3,5 0,3 - 202,5 3,6 6,8 11,3 3,6

2008 129,1 83,9 2,4 1,7 4,2 221,3 9,6 3,5 7,4 5,7

2009 144,8 87,9 1,2 4,8 16,4 255,1 15,3 -7,8 -6,0 0,9

2010 155,3 84,3 0,0 10,2 1,4 251,4 -1,4 1,2 1,9 0,7

2011 259,5 3,2

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TE candidates

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TE enrolment characteristics

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• Hiring/firing in autonomy of HEIs

• Staff in public HEIs are civil servants – the wages

are set by the Salary system in Public Sector Act

• Staff can also be contracted

HEIs - Staff

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HEIs - staff

2003 2004 2005 2006 2007 2008 2009

Total No. 5673 6137 6896 7273 7531 7580 8291

FTE 5135 5333 5509 5786 5940 5682 5740

500

1,500

2,500

3,500

4,500

5,500

6,500

7,500

8,500

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Why change HE funding?

Weaknesses of the previous system (up to 2003):

• The way funds were distributed to HEIs.

• Funds were not (always) spent rationally.

• Governmental controls were focused on the way money was

spent and not on the realization of goals and quality

assurance in HE.

• Slow responsiveness of HEIs to changes (example:

demographic, HRM policy, labour market needs, etc.).

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Desirable qualities of the new funding model were:• Flexibility: it should recognise differences between HEIs and

allow their flexibility to maximise autonomy (academic and financial) so that they can achieve their mission.

• Choice: HEIs should not be limited in offering a selection of study programmes.

• Quality: funding should reward and promote excellence of results in education.

• Simplicity/efficiency: it should be simple for governing by the state and comprehensible for HEIs and students. It should assure the best results for invested funds.

• Predictability: it should enable planning with a certain level of predictability both, for the state and HEIs.

Desired qualities

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LS = OLS + NLS : (Annual Funds = Fixed AF + Normative AF)

LS (AF)- OLS (FAF)= NLS (NAF)

LIV = (LS – Σ OLS) / Σ ((Š + D * Ud ) * f(s))

The annual initial value (LIV) represents the standard annual funds per student in the first study group and is calculated as the quotient of the difference of annual budget funds (LS) and the basic annual funds of all HEIs ( OLS) and the total number of students (Š) and the number of graduates (D) multiplied by the weighting (Ud) and the factor f(s) of the study group to which the HEIs.

Formula (2004-2010)

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New decree (2011-)

In comparison with the previous financing system, the new lump sum represents 100% of value from 2010 (fixed part), which can be increased or decreased by 3% each year.

This variable part is calculated through three indicators which measure the improvement of value compared to the previous year in:• completion rate of current generation of students,• progress of students from first into second year of studies, • international incoming and outgoing mobility of students.

The main limitation at setting the indictors was the availability of data on the level of student. The data exists on HEIs, but not on national level. It is expected that the new information system on HE will solve this problem within next two years.

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Reasons for the new decree

• Demographic trends

• Development phase of the HE

• Fixed part (100%) gives the HEIs needed stability and

protects public HEIs

• Development funds have to be provided by the budget

• …

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Strengths:

• Autonomy of universities

• Financial autonomy of universities

• HRM (policies) of universities

Weaknesses:

• Decentralized universities

• Inefficiency in spending of (public) funds

• Low efficiency of HE: drop out, long duration of study

• Low effectiveness of HE: unemployment or inappropriate

employment of graduates

Strengths / Weaknesses

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Challenges

• Limited resources in national budget– Efficiency in spending of resources

• Equity– “Free” higher education

– Full time / part time studies

• Accountability (vs. autonomy) – Professional management at universities

– Transparent management

– Responsiveness and reporting to society

• Quality

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• Increase of total funds available to HE and scientific and

research work.

• By means of multi-annual financing mechanisms that will

reward successful HEIs to create a system of financing with a

basic and a developmental pillar.

• Ensure stability of financing of scientific and research activities

of universities through the introduction of comprehensive

financing of research (i.e. research “lump-sum”).

• Central HE information system (students,

staff in HE, HEIs, study programmes).

Master plan for HE 2020

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Public (and private) funds spent in HE for:

• HEIs for teaching and

• students for aid

have to serve the same purpose – “3 e”:

• equitable access

• efficient study (quick and quality study)

• effective study (quick and good employability)

therefore the proper, jointly developed and balanced mechanism

and instruments of theirs’ distribution among the HE participants

have to be developed and implemented.

Instead of conclusion