Financing for equity in higher education

1. Education resources to subnational governments

Introduction

Key financing indicators (UIS Data)

The gross enrolment ratio for tertiary education for both sexes in Bhutan was 13.01% in 2024. The initial government funding per tertiary student as a percentage of GDP per capita was 26.34% in 2023.

Tuition-free status

Public tertiary education is not tuition-free in Bhutan.

Governance

In Bhutan, the Ministry of Education and Skills Development (MoESD) manages all levels of education in the country, with the Department of Adult and Higher Education specializing in all aspects of tertiary education, non-formal education and adult education. The department is further separated into four divisions, including the Scholarship and Student Support Division and the Tertiary Education Board. According to the 2010 Tertiary Education Policy, the Ministry of Education has the responsibility to formulate tertiary education policy and ensure that the necessary funding for tertiary education is available from all possible sources.

1. Education resources to subnational governments

Higher Education Institutions (HEIs) in Bhutan receive funds directly from the government. As such, there are no sub-national funding methods.

2. Education resources to institutions

Funding for private universities in the absence of public institutions

According to the 2010 Tertiary Education Policy, universities and autonomous institutes may not be operated for private profit; colleges may be funded by the government or be private and may or may not be for-profit. Colleges may be affiliated with an accredited university. For example, the Royal University of Bhutan (RUB) was established under a Royal Charter as a system of federation of colleges. RUB has nine constituent colleges and two private colleges. The RUB is responsible for the planning, research, funding, external relations, internal quality assurance, program validation, and award of degrees of its constituent and affiliated institutions.

Government funds are prioritized to public universities, colleges, and specialized institutions based on national needs. Private HEIs may apply for funds that support research of national priority and for specific projects.

Allocation and equity

According to the 2010 Tertiary Education Policy, the Royal Government of Bhutan distributes funds to HEIs through block grants. Budgets are allocated over a five-year period. A percentage of the funds is allocated to support students directly based on merit and need. Universities may also receive capital and one-off project expenditures on a need’s basis. The Tertiary Education Board supports the tertiary education system through planning and funding—responsibilities include validating and approving all plans and proposals for the allocation of funds.

There are three kinds of expenditure that the state government bears for tertiary education: capital expenditure—for one-off infrastructure development; operating expenditure—to cover all recurrent costs such as staff costs and materials; and student costs in the form of scholarships. Funding is prioritized based on two types of needs: specific economic needs- needs related to jobs necessary for the realization of economic development goals; and general development needs- needs that tie in with personal development and enrichment needs, such as the enhancement of the Gross National Happiness. The Ministry of Economic Affairs determines the economic priorities and the Ministry of Labour and Human Resources determines the manpower needs. The Ministry of Finance is responsible for budgets.

To establish a clear understanding of funding usage, the Tertiary Education Board signs a contract with the institutions that receive funding. The contract includes a financial statement of the proposed use of the funds, procedures to be followed by the institutions for procurement, and a report detailing how the funding has been used. The recurrent annual operating expenditure of all public institutions is calculated on a per student basis for every course offered. The cost is determined by the board and varies based on each subject area. Funds are allocated based on operational principles such as giving priority to institutions whose quality can be most improved with the last amount of resources. Funding is also secured on a long-term basis.

Universities may also utilize tuition fees and raise funds to recover costs, such as through alumni grants, research, and consultancies.

Additionally, student scholarships are paid directly to domestic universities and colleges.

3. Education resources to students

Admission for vulnerable groups

The 2025 National Education Policy states that Higher Education Institutions (HEI) should adopt an admission policy that prioritizes merit and embraces inclusivity. Universities have the autonomy to determine their own admission criteria. All listed higher education institutions under the purview of the Royal University of Bhutan have merit-based admission policies. No information on the admission of vulnerable groups was found.

Scholarships, grants and loans for vulnerable groups

Government funds may be provided to students in the form of loans, partial grants, and full scholarships. The Scholarship and Student Support Division (SSSD) under the Department of Adult and Higher Education within the Ministry of Education and Skills Development (MoESD) administers the entire Undergraduate Scholarship Programme. Most of the scholarships are provided based on academic merit. There are three main categories of scholarships implemented by the MoESD: Royal Government of Bhutan (RGoB) Scholarships, Government of India (GOI) Scholarships, and Ad-hoc scholarships. Ad-hoc scholarships are unplanned ad-hoc offers, mainly bilateral and institutional scholarship offers. The previous two are detailed below:

RGoB scholarships
These scholarships are funded by the Royal Government of Bhutan for domestic HEIs as well as higher education in India and other third countries. The programme includes full scholarships for higher students in technical and professional fields. The RGoB-In Country Scholarships fully fund students pursuing higher studies at government-approved private colleges. In 2019, 64% of students in Bhutan were attending a HEI with an RGoB scholarship. Prioritisation of scholarship slots considers resource shortages, relevance of the course, and national priority. The scholarship itself covers tuition, housing, and food.

Universities also implement their own scholarship programmes using government funds.

GoL Scholarships
The scholarships funded by the Government of India are generally under Project Tied Assistance (PTA). The programme includes full scholarships for professional and generic fields.

Student Loan Scheme
From 2014 to 2018, the Student Loan Scheme for Tertiary Education was implemented with an allocation of BTN 150 million. Loans are distributed through a student loan committee consisting of members from the Ministry of Labour and Human Resources, the Ministry of Education, the Ministry of Finance, and several important universities. A total of 488 students availed the loan, of which 237 successfully graduated. There are also many other loan options available that are through Bhutanese banks.

In 2025, the government launched a new concessional education loan scheme for students from disadvantaged economic backgrounds through the Bank of Bhutan Limited (BoBL). The loan is designed to support those from families with an annual household income below BTN 500,000. A total of BTN 600 million has been budgeted for this programme.