Funding hike for scholarships including study abroad

The Indonesian government has doubled its contribution to a scholarship endowment fund this year to provide more opportunities for graduate and doctoral students to study at home and overseas and in response to increasing calls to improve access to universities for students from poorer provinces.

As part of the government’s effort to upgrade the country’s skills base, this year Indonesia will provide some IDR3 trillion (US$225 million) in scholarships for 12,000 students in an effort to boost the quality of the country’s human resources, said Eko Prasetyo, director of LPDP, the Indonesian acronym for the Indonesia Endowment Fund for Education.

This is a dramatic upsurge from the value of 2016 scholarships of IDR1.4 trillion (US$105 million). In addition, the government is hoping to further increase scholarships to a possible IDR20 trillion (US$1.5 billion) next year if legislative approval is received.

Eko told University World News the scholarships would be distributed to Indonesian students to pursue postgraduate, masters and doctoral degrees at home and abroad and for those working on theses and dissertations.

With total assets of some IDR22.5 trillion currently under LPDP management, there have been some 16,295 LPDP scholarship recipients since the fund became operational in 2013 – 8,406 students at home and 7,889 students overseas at some of the world’s top universities.

According to official statistics for those funded to study abroad, the most popular destination country is the United Kingdom, followed by the Netherlands, Australia, the United States, Japan and Germany, with others going to Russia, Sweden and France. Grantees must return to Indonesia after completing their studies abroad, with sanctions imposed on those who do not return.

Some 10,406 are still studying with funding from the scheme, mainly for postgraduate degrees. Still, university graduates make up only 7.2% of the country’s workforce – a figure far below neighbouring Malaysia at 20.8%.

Disadvantaged students left out

The government was pushed to double the size of the scholarship fund with the rising number of applicants sparking tougher competition between applicants. This meant that only students with good academic scores and those graduating from the most reputable schools and universities managed to win the scholarships over students from poorer provinces.

Finance Ministry data shows that in 2013-14, of 4,580 scholarship recipients, only 466 students were from less-developed districts of Java Island, suggesting only 10% of disadvantaged students are able to benefit from the scheme.

Legislators say they have received reports of wealthy students enjoying the LPDP scholarship. “A lot of LPDP's successful applicants come from affluent and well-educated families in Java. They push aside young people in eastern Indonesia who lack the academic abilities and English skills required,” Yasonna Laoly, the minister of law and human rights, said.

When LPDP was set up in 2010, before becoming operational in 2013, it was designed to bridge inequalities in higher education opportunities between Java and other islands, particularly outer and less-developed districts. Its so-called afirmasi or affirmative action scholarships, enables students to be selected with lower scores in the English-language TOEFL test of between 400 and 450.

“Although it is open to all Indonesians, the LPDP scholarship gives priority to students living in border and less-developed areas,” Eko said, adding his office has identified 65 outer districts in 12 provinces and 183 less-developed districts spread over 27 provinces.

However, almost all outer districts are also less-developed.

Indonesian President Joko Widodo has already called for fairer distribution of LPDP scholarships, although it is not immediately clear whether the scholarship fund will increase access to higher education for disadvantaged students.

Instrument for human resource development

The Indonesian president also highlighted the low proportion of engineers in Indonesia – just 2,672 for every 1 million people, well behind Malaysia’s 3,333, Vietnam’s 9,037 and South Korea’s 25,309.

“LPDP should become instrumental to Indonesian human resource development and should result in consummate professionals that bring Indonesian maritime, energy industry, food, manufacture into advancement,” Joko Widodo said earlier this month during a cabinet meeting on the management of the fund.

But with massive foreign investment bringing big foreign corporations into the country, the dramatic increase in LPDP funds may not necessarily benefit Indonesia’s domestic industry as scholarship students often prefer jobs in foreign companies after graduation.

“My fellow applicant at the multi-national company I am working for now is an LPDP scholarship awardee,” said Edy Setyanto, who just got a position in the Jakarta company last month. “The reason is human. He sees better wages and facilities he cannot get from domestic companies,” Edy added.

“He is so lucky. He studied abroad with the government money and returned home to secure a good job in a foreign company. If this becomes common practice among LPDP recipients, then we have a problem.”

In response to a debate to further increase its contribution to the LPDP fund to IDR20 trillion next year – with the government highlighting a ‘demographic bonus’ or huge rise in the number of young people in the productive age group and a need to upskill the population – Minister Yasonna said LPDP is necessary for Indonesia’s human resource development but should be subject to assessment and evaluation.

“Only after we see clearly that the scholarship scheme works efficiently will we have a reason to keep it going,” he said.