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)
In 2014, the gross enrolment ratio for tertiary education (both sexes) was 6%. In the same year, the initial government funding per tertiary student as a percentage of GDP per capita was 275%. In 2012, initial household funding was 48%.
Tuition-free status
According to the 2019 Higher Education Proclamation (No.1152), public higher education institutions may charge tuition fees, the amount of which is regulated by the government under a cost-sharing scheme. Under this scheme, students pay a ‘graduate tax’ amounting to 15% of tuition-related costs to the government after completing their studies by paying at least 10% of their monthly income. Students enrolled in evening, weekend and summer programs (both undergraduate and graduate) pay tuition fees, which account for the largest amount of internally-generated income for public universities. Approximately 45% of all students at public universities pay some kind of tuition fee through attending extension/evening, summer or distance undergraduate programmes. ‘Regular’ students in undergraduate programmes, as well as graduate students, do not pay compulsory fees.
Governance
The Federal Ministry of Education (MoE) is responsible for formulating policy and establishing guidelines for both general and higher education. Public universities are supervised and funded directly by the federal government (Ministry of Education).
Public education spending heavily favours higher education (approximately 40% of public education funding), despite higher education serving only 3% of all students. The federal government invests most of its resources in higher education.
A reform of education expenditure allocation is underway to restructure government expenditure to reallocate spending from tertiary to general education. This has led to a decline in the share of federal-level allocation, which largely focuses on higher education. The reallocation aims to grant more autonomy to universities, reducing their dependence on government funding.
The Higher Education Relevance and Quality Agency accredits higher education institutions (both public and private), while the Higher Education Strategy Centre is responsible for formulating Ethiopia’s higher education strategy, conducting research/studies on higher education policies, practices, and training.
1. Education resources to subnational governments
Regional governments are primarily responsible for managing and administering general and secondary education, as well as teacher training programmes and institutions. They are not responsible for the funding, management or administration of higher education. All public universities receive their budgets directly from the federal government.
2. Education resources to institutions
Funding for private universities in the absence of public institutions
The Federal Ministry of Education’s financial oversight is limited to public higher education institutions. Private institutions rely heavily on tuition fees as their main source of funding. However, according to the 2019 Higher Education Proclamation (No.1152), the government may subsidise non-profit private institutions that ‘strengthen the developmental efforts of the country by preparing particularly good quality professionals’. Non-profit private institutions may receive earmarked additional subsidy funds to support degree programs offered in specific fields of study or interdisciplinary studies; or as an incentive if the degree programs are of a particularly high quality.
Allocation and equity
Public higher education institutions are funded by the federal government through block grants that are based on student enrolment, staff population, discipline aggregation, the context of institutions, and their previous year's budget. According to the 2019 Higher Education Proclamation, block grants to public institutions are based on strategic plan agreements, which should contain (among others) strategic objectives and academic priorities; planned research projects; the number of students and qualifications of academic staff; social goals to enhance equity and competence of academic staff, increase the proportion of senior positions held by women, and support disadvantaged students; indicative allocations of the block grant budget; and appropriate mechanisms of accounting, monitoring, evaluation and reporting. Though heavily dependent on state funding, public institutions are allowed by law to be engaged in certain income-generating activities, such as collection of tuition fees from students not covered under the cost-sharing initiative, donor funding, partnerships, and campus services.
One of the reforms of public higher education financing was the introduction of cost sharing since 2003, where students cover 15% of their tuition fees, while the government pays the rest. Revenue generated in terms of tuition fees from 'non-regular' students, such as those enrolled in evening, weekend and summer programs, accounts for the most substantial amount of internally-generated income for public universities. The government is planning to implement a performance-based funding formula based on block grants to the public higher education institutions.
The 2020 Higher Education Policy aims to introduce flexible, formula-based block grant funding that considers factors such as performance, student enrolment and number of staff, infrastructure facilities, and nature of the institution.
3. Education resources to students
Admission for vulnerable groups
The federal government has significant control over public higher education institutions, including setting admission standards and enrolment quotas. According to the 2019 Higher Education Proclamation, there shall be ‘special admissions procedures for disadvantaged citizens determined by regulation’.
The 2020 Higher Education Policy aims to develop a system to provide affirmative action to talented, disadvantaged and marginalised groups, as well as develop legal frameworks to enhance the level of participation of female students and staff. A quota system was specifically introduced to facilitate the admission of students from under-represented groups (women, students with disabilities and those from emerging pastoral areas) by lowering the admission threshold for these groups, with admission scores and placements decided by the Ministry of Education each year.
Scholarships, grants and loans for vulnerable groups
The 2020 Higher Education Policy aims for the development of scholarships for talented, disadvantaged and marginalised students and/or for those students who study a field prioritised by the government. It also promotes the establishment of alternative student financing systems, such as student loans, cost-sharing and grants. However, there is no national, government-funded scholarship or student loan programme currently in place.
The government provides a loan which must be repaid, starting one year after completing the degree. Certain programmes are chosen for exemption, whereby students can repay in kind.
4. Support for students’ living costs
Transportation
There is no government support for student transportation.
Accommodation
Public higher education students are responsible for 15% of the cost of their tuition, with the cost of food and accommodation covered by the government.
Textbooks
The Federal Ministry of Education assumes direct responsibility for the development of textbooks for both general and higher education.
