Measures needed to improve higher education financing

Although the higher education systems of North African countries followed European – French and English – policies and offered education at all levels for free, growing demand and limited public funds have forced countries to recover some costs from students. This has lead to steady growth in the cost of university in the past decade.

University World News interviewed Manar Sabry, an Egyptian higher education expert at the State University of New York at Buffalo, United States, and author of Funding Policy and Higher Education in Arab Countries.

She spoke about university financing in North Africa, trends in tuition fees and degree costs, forms of cost-sharing and the issues raised, situations in different countries, and ways of improving higher education financing.

Factors pushing up costs

Rising higher education costs in North Africa were mainly caused by growing demand for higher education, increases in per student costs, and the inability of higher education to compete with other economic sectors, according to Sabry.

A 2011 World Bank report, Breaking Even or Breaking Through, pointed out that the economic crisis and the Arab Spring had raised additional challenges for most countries in the Middle East and North Africa.

“Education is a labour-intensive sector as it requires more labour but is more resistant to advances in productivity than other productive (industrial for example) sectors. The situation is exacerbated by the increasing cost of technology, research and innovation,” said the report.

“Politically and financially, sectors like health or even basic education are more appealing than higher education; at least because the [former] target wider segments of the population. Thus [the] higher education sector cannot compete with the other sectors.”

Sabry pointed out that as developing countries, North African nations lacked administrative capacity to increase revenue through extra taxes or even more effectively collect currently imposed taxes, reducing the funding available for all areas of government spending.

North African cost-sharing models

The policy of mass higher education adopted by North African countries since the 1960s was a major reason for the crisis in financing higher education, said Sabry.

To raise university revenue in order to meet growing expenses in higher education, universities across the world – particularly in low-income countries – had introduced cost-sharing policies, imposing different forms of fees for specific services to shift the financial burden of higher education from the state to students, parents or extended families.

According to the cost-sharing model, wealthy parents and students should pay more in tuition fees than underprivileged families, and full scholarships should be offered to qualified people who cannot afford to pay.

According to a 2011 report, Education for Employment: Realizing Arab youth potential, more than half of young Arabs would be prepared to pay for education if it significantly improved their job prospects.

In North Africa, cost-sharing took several forms – “many of them with indirect application to avoid any negative political consequences”, said Sabry.

Cost-sharing was not reflected in imposed or rising tuition fees but in forms of ‘user charges’ or fees to recover the costs of residences and dining halls – traditionally free or highly subsidised – and other services, in policies to reduce the number of students who receive stipends and grants, and by ignoring inflation in stipends or raising service fees.

Also, indirect cost-sharing forms were implemented by charging a variety of service fees such as exam fees, application fees and transcript fees, and charging more for programmes that were in high demand.

Finally, there was the introduction or expansion of private higher education, which removed the responsibility for providing more university places from government, Sabry pointed out.

Situation of different countries

Problems with financing higher education and suggested solutions for six Arab states, including three in North Africa – Egypt, Morocco and Tunisia – were outlined in a 2010 report, Financing Higher Education in Arab Countries.

To deal with financing problems, Sabry said, North African countries implemented cost-sharing models using different approaches.

In Morocco, for example, cost-sharing was introduced by freezing the amount of stipends regardless of inflation as well as offering stipends – based on need, and for minorities – only to some students. Before 1997, stipends were given to all students.

In Egypt, student fees were imposed and increased. Fee-paying programmes within public universities were established – with higher fees for programmes taught in English or French – and private universities were expanded.

In Tunisia, a significant private sector currently exists as a way to deal with the government’s budgetary constraints in funding universities, according to 2010 report, Financing Higher Education in Tunisia.

All North African countries introduced or allowed expansion of an existing private sector with the exception of Algeria. Figures have shown that public spending per student as a percentage of gross domestic product in Algeria has declined significantly in the past decade.

“In fact, even with the implementation of various forms of cost-sharing, the cost of public higher education in Algeria, Egypt, Morocco, Libya and Tunisia is still very small for the majority of the students,” Sabry pointed out.

Impact of cost-sharing

Unfortunately, Sabry continued, cost-sharing was implemented in North Africa in ways that did not achieve any of its goals – such as making universities more cost-conscious and competitive, making students more serious about graduating on time to minimise costs, or improving equity.

“This is because the cost-sharing policy is partially implemented in North African countries, so the income generated is not sufficient to solve the financial crises of the higher education sector.”

In Egypt for example, increase in tuition fees was accompanied by an equal cut to the government funding allocation to universities.

“The demand for higher education has shown low elasticity to price, thus universities will not be more efficient or responsive to market needs, and the implementation of cost-sharing did not come with more financial aid or loans for qualified students.

“So it actually increased inequality and offered more options to affluent students.”

The way forward

Sabry suggested several actions to attain a balance between education quality and university fees and affordability, especially for low-income students.

“It is important to revive the culture of endowment. The practice of Waqf [endowment], once one of the major – if not the only – sources for funding education, must be targeted and restored. This will bring in supplemental funds for universities. This is equivalent to the culture of philanthropy in the US,” Sabry said.

“Arab countries should have clear national goals for quality and equity measured by quantitative indicators that are used internationally.

“Overall, new policies – whether to enhance quality or to generate more funds – must consider the reduction of stratification in higher education because the less stratified a society is, the more understanding, secure and prosperous it becomes.

“I do not encourage the implementation of student loans, especially with the high rate of unemployment. Rather, governments should adopt a merit-based fee waiver for needy students, so that they are subsidising the individual instead of the institution,” argued Sabry.

“It is equally important to tie any new policy with adequate change in governance, and setting tuition fees should also take into consideration the culture, per capita income, ability to pay (through job opportunities), as well as the availability of financial assistance.

“Improving the quality of education needs continuous staff and faculty member development, increases in salaries and an effective system of incentives and penalties,” Sabry concluded.