Financing for equity in higher education
1. Education resources to subnational governments
2. Education resources to institutions
3. Education resources to students
4. Support for students' living costs
Introduction
Key financing indicators (UIS Data)
The gross enrolment ratio for tertiary education for both sexes was 44.88 in 2023. The initial government funding per tertiary student as a percentage of GDP per capita was 21.04 in 2015, the most recent year for which UIS data was available. The initial household funding per tertiary student as a percentage of GDP per capita was 16.38 in 2015, also the most recent year for which UIS data was available.
Tuition-free status
Public tertiary education in Indonesia is not tuition-free according to current national laws and government policies.
Governance
The responsibility for financing higher education, including allocating and overseeing education budgets, falls to several ministries and government organizations. The 2024 Presidential Regulation No. 139 created the Ministry of Higher Education, Science and Technology (Kementerian Pendidikan Tinggi, Sains, dan Teknologi), which now oversees higher education policy, planning, funding, and regulatory oversight. These responsibilities previously fell to the Ministry of Education, Culture, Research, and Technology (Kemendikbudristek). The Ministry of Finance (Kementerian Keuangan) allocates state resources to all education ministries and manages the Education Endowment Fund (LPDP), which supports scholarships and research across higher education. The Ministry of Religious Affairs (Kementerian Agama) oversees the financing and regulation of Islamic and other religious higher education institutions.
1. Education resources to subnational governments
Public universities are primarily funded centrally, with their budgets allocated directly from the Ministry of Higher Education, Science and Technology. Per articles 83 and 84 of the 2012 Law on Higher Education (Law No. 12/2012), regional and community governments may also contribute funding support for higher education institutions.
2. Education resources to institutions
Funding for private universities in the absence of public institutions
In accordance with the 2012 Law on Higher Education (Law No. 12/2012), private higher education institutions are eligible to receive state budget funding, primarily in the form of grants. This funding is not connected to the availability, or lack thereof, of a public institution in the same area.
Allocation and equity
The Government provides funding to public higher education institutions through the state budget, as mandated by the 2012 Law on Higher Education (Law No. 12/2012). The core budget mechanism relies on the established Standard Operational Costs of Higher Education Units (SSBOPT), which the Government establishes periodically. The SSBOPT covers operational costs, lecturer and staff expenses, and resources designated for investment and development.
Per Article 88 (1) of the Law on Higher Education, this calculation considers the achievement of National Standards for Higher Education, the specific type of academic program, and a regional cost index. The regional cost index adjusts for differences in living costs, infrastructure, and service delivery across regions, providing additional funding to universities operating in remote, frontier, or high-cost locations.
Additionally, Article 74 states that institutions enrolling students from economically disadvantaged backgrounds and students from remote and underdeveloped regions may receive specific education cost assistance from the government.
3. Education resources to students
Admission for vulnerable groups
Article 74 of the 2012 Law on Higher Education (Law No. 12/2012) requires public higher education institutions to actively recruit and accept at least 20% of their new students from two specific groups: those with high academic potential but limited economic means, and those from frontier, outermost, and underdeveloped (3T) regions.
Admissions to public higher education institutions in Indonesia are centrally managed. Before 2025, the state university entrance selection system was organized by the National Student Admissions Selection Committee (SNPMB) and offered three pathways to admission: the National Selection Route Based on Achievement (SNBP); National Selection Based on Tests (SNBT); and Independent Selection. SNBP is based on high school academic records and achievements, conducted through a centralised government portal, while SNBT is based on a standardised test administered nationally by an official government agency for all participating public universities. The independent selection route is managed directly by individual universities and allows additional opportunities for applicants outside the centralized system. Universities can use these applicant tracks to ensure they meet nationally mandated quotas.
In 2025, the Minister of Primary and Secondary Education announced the implementation of the New Student Admissions System (SPMB) to replace the previous admissions system. The system offers admission to public higher education institutions through four distinct tracks: the student residence track, the achievement track, the affirmative track, and the transfer track. The domicile track is based on students’ areas of residence; the achievement track considers students with both academic and non-academic accomplishments; the affirmative track supports students with disabilities and those from underprivileged backgrounds; and the transfer track supports students whose parents have relocated for work.
Scholarships, grants and loans for vulnerable groups
Per Article 88 of the 2012 Law on Higher Education (Law No. 12/2012), costs borne by students for higher education must be adjusted based on the economic capability of the student, their parents, or the financier. To guarantee support for economically disadvantaged students, Article 76 mandates that the government provide direct financial assistance through three primary methods: scholarships based on achievement, financial assistance or exemption from education fees based on economic need, and interest-free loans repayable after the student graduates and/or secures sufficient income.
The Kartu Indonesia Pintar Kuliah (KIP Kuliah), launched in 2020 as the successor to the Bidikmisi initiative, is Indonesia’s primary national scholarship programme for increasing educational equity at the tertiary level. KIP Kuliah is a government-funded programme that provides comprehensive financial support for economically disadvantaged students admitted to accredited public and private universities. The scholarship covers full tuition fees and a regular living allowance, allowing recipients to pursue higher education without financial burden. Eligibility is determined by academic merit and documented economic hardship, verified through family income statements, KIP cards, or social welfare registration. Participating students must be accepted into an accredited study program and apply via the national KIP Kuliah portal.
4. Support for students’ living costs
Transportation
No specific government support for student transportation was found, but the Kartu Indonesia Pintar Kuliah (KIP Kuliah) programme provides students with a living allowance that may also cover transportation expenses.
Accommodation
Support for student accommodation is available through the Kartu Indonesia Pintar Kuliah (KIP Kuliah) programme.
Textbooks
No information was found on specific government support for student textbook purchases, but the Kartu Indonesia Pintar Kuliah (KIP Kuliah) programme’s living allowance may also be used to cover related educational expenses such as textbook purchases.
