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 21.29 in 2024. The initial government funding per tertiary student as a percentage of GDP per capita was 21.87 in 2015, the most recent year for which data is available. The initial household funding per tertiary student as a percentage of GDP per capita was 76.71 in 2015, which was also the most recent year for which data is available.
Tuition-free status
Public tertiary education in Nepal is not universally tuition-free according to national laws and policies.
Governance
Higher education financing in Nepal is coordinated through the Ministry of Education, Science and Technology (MoEST) and the University Grant Commission (UGC). MoEST is responsible for formulating national education policies, including the policy framework for financing tertiary education. UGC, an autonomous statutory body established under the 1993 University Grants Commission Act, 2050, disburses government grants to universities and campuses, manages budget allocations through both block grants and formula-based funding mechanisms, and makes recommendations to the government for budget revisions.
1. Education resources to subnational governments
Public higher education funding itself remains highly centralised. Under the 1993 University Grants Commission Act, 2050, federal resources for higher education flow mainly to the University Grants Commission (UGC), which then allocates recurrent and capital block grants directly to universities and campuses.
Nepal’s higher education system comprises a dual structure of national and provincial universities. There are 15 national universities funded directly by the central government. These universities typically operate multiple campuses. A defining feature of the system is its affiliation model, through which private colleges can also apply for inclusion within the main university.
Provincial universities emerged following the 2015 Constitution of Nepal, which empowered provincial governments to establish higher education institutions aligned with regional development priorities and reached six in number by 2025. While provincial universities are financed from provincial budgets, their funding is derived primarily from federal fiscal transfers. Provinces may provide targeted grants to national and provincial universities, and universities generate additional income from tuition fees and other sources.
2. Education resources to institutions
Funding for private universities in the absence of public institutions
Per the 1993 University Grants Commission Act, 2050, non-state or private tertiary education institutions can be established only as affiliated campuses of universities, which grant them the authority to offer university programs. There is no institutional public funding for fully private universities or private campuses, even in areas where no public university is present.
Federal budget allocations for higher education are channeled through the University Grants Commission (UGC) and are restricted to constituent public and community campuses that meet UGC eligibility requirements. Private universities and private affiliate campuses are expected to rely on tuition fees, donations and other private sources for their operating and capital costs, and they do not receive recurrent or capital block grants from the government.
Allocation and equity
Government subsidies for public higher education institutions are allocated primarily through the University Grants Commission (UGC), which provides universities and eligible constituent and community campuses with funds through block grants in two categories: operational and developmental. The specific funding model is outlined in the Higher Education Grants Policy, as detailed in UGC Annual Reports.
The recurrent budgets of Tribhuvan University, Nepal Sanskrit University. Far Western University, Mid-West University and Agriculture and Forestry University are determined according to the number and category of academic and administrative positions, rather than by a perstudent funding formula. Autonomous constituent campuses of Tribhuvan University also receive allocations based on the total approved faculty and administrative positions on each campus. Newer national universities such as Kathmandu University, Purbanchal University and Pokhara University are funded through agreed formulae that assume undergraduate programmes should largely recover their operating costs from tuition and other own-source revenues; federal funds are selectively targeted.
Within this overall framework, grants to community campuses are provided based on predetermined criteria. The formulae consist of minimum grants plus additional grants based on the number of students enrolled, the number of programmes being run, the geographical location of the campus, the availability of constituent campuses, the programmes offered in science and technology subjects, the pass rate, and QAA certification. Development funds, focused on infrastructure, are provided based on need and available funds.
3. Education resources to students
Admission for vulnerable groups
There are no specific admission criteria for vulnerable groups at the national level. Public higher education institutions in Nepal apply programme-specific admission arrangements that reserve a proportion of seats for vulnerable and underrepresented groups in disciplines, including as medicine and engineering, rather than a single uniform national quota across all programmes. These measures are grounded in provisions in the 2015 Constitution of Nepal, which call for inclusion and proportional representation of historically marginalized communities.
For example, the National Medical Education Regulations 2077, issued by the Medical Education Commission (MEC), require public institutions to reserve seats within the governmentquota intake for members of the following groups: women, Dalits, Indigenous nationalities, Madhesi, Tharu, Muslims, persons with disabilities, students from geographically remote or disadvantaged regions, and children of martyrs and conflictaffected families. These regulations aim to ensure that candidates from marginalized backgrounds benefit from preferential access alongside general applicants.
Scholarships, grants and loans for vulnerable groups
Several federal scholarships support access to higher education and are primarily administered by the University Grants Commission (UGC) and the Ministry of Education, Science, and Technology (MoEST).
UGC awards scholarships annually to expand access to higher education for students who are economically and socially marginalized. Under the Guidelines for Providing Scholarships in Higher Education, 2079 and subsequent Higher Education Scholarship Management directives, UGC awards grants directly to eligible students enrolled in accredited bachelor’s and master’s programmes. In 2024, UGC’s higher education scholarship schemes targeted economically disadvantaged students, children of martyrs and conflict victims, students with disabilities, students from the Dalit community, Mukta Kamalari, and female Muslim students.
MoEST administers scholarships independent of UGC-funded scholarships that fall under three main categories: international scholarships, subject-specific scholarships, and provincial scholarships. International scholarships offer fully funded opportunities to study abroad in countries such as China, India, Russia, and Bangladesh, covering tuition, living expenses, airfare, and accommodation. Subject-specific scholarships target specific fields and specialized academic pathways. At the provincial level, MOEST also facilitates scholarships.
Nepal does not operate a universal government studentloan scheme for all higher education students. Access to higher education loans is provided mainly through commercial banks.
4. Support for students’ living costs
Transportation
No information was found on a dedicated national programme that provides transportation support to higher education students.
Accommodation
No information was found on a dedicated national programme that provides accommodation support for higher education students. Government scholarships administered by the Ministry of Education, Science and Technology may include a monthly living allowance for eligible students who must stay in hostels to study.
Textbooks
No information was found on a dedicated national programme that provides support for textbook purchases for higher education students. Some higher education scholarships administered by the Ministry of Education, Science and Technology include a small allowance for books and stationery as part of general study costs.
This profile was reviewed by Kedar Prasad Acharya, PhD, Director, University Grants Commission, Nepal.
