Financing tertiary education - Holness' proposal a step in the right direction

Kofi Nkrumah Young, Guest Columnist

As I understand it, Education Minister Andrew Holness is proposing that instead of funding tertiary institutions as a means of providing supplemental assistance to students, that the funding go directly to the students by way of a loan facility. This would mean that the Students' Loan Bureau (SLB) would be adequately capitalised so that it can provide loans to all students who require it.

The student, in return, would be required to participate in the cost of his/her education by repaying the loan or providing service to his country, in which case the Government would assume the repayment or part thereof.

The proposal is different from my own proposal of per-student, per-programme subsidy, but nonetheless I am offering my support because it addresses some of the concerns that I have about the present arrangement in the public funding of tertiary education. My reasons for support are hereunder presented.

The current arrangement came out of the Sherlock Commission's Report of 1989 whereby institutions were ranked for the purpose of determining salary levels and the funding determined thereafter. As such the University of the West Indies (UWI) was ranked at the top, the College of Arts, Science and Technology - now the University of Technology, Jamaica (UTech) - was ranked second and the teachers' colleges third. Salary levels which are negotiated with the Ministry of Finance are determined in that order, and since the commitment is primarily to cover the cost of salaries, the level of subsidy follows in that order.

Less for same service

This may have been a proper basis for a period, but as times changed, this basis became difficult to justify. At the time of the Sherlock Commission, there were different missions and required standards for these institutions. Now UTech, Mico and Northern Caribbean University have joined the university league and are expected to function as such. Why, therefore, should their staff be paid less for the same level of service? As universities, they are required to teach, do research and provide community service at acceptable standards. Legislation will be coming shortly that would enable the teachers' colleges to be degree-granting, and they, too, would be questioning the applicability of the current classification to their new mission.

It was against this background that I had previously called for the per-student, per-programme funding, whereby public subsidy would not be based on salary levels but on the student numbers and the type and cost of the programmes they are pursuing. The minister's proposal, however, avoids the disturbances that would result from the period of adjustment that my proposal would cause. Instead, it would allow each institution to continue its operations at the current cost levels and, over time, allow for market adjustment. Simply put, the students will, over time, determine what cost they would be willing to pay an institution according to their perception of the quality of the programmes.

A Push towards Transparency

The current situation where two different ministries determine the funding for the regional and national institutions is not transparent. For the regional institution, the process is through the Ministry of Finance, while the national institutions are required to go via the Ministry of Education. This does not result in unity of purpose and direction for the educational services of the country and does not result in the transparency of the process for determining the level of funding. Historically, because of its superior mission of teaching and research, the UWI administration was awarded higher levels of resources than the national tertiary institutions, but as was pointed out earlier, there is now more equity of purpose among the players in the higher-education market and, as such, they should be treated on the same basis.

What about Efficiency?

In England, the Higher Education Funding Council predetermines prices per-subject clusters. Institutions are paid accordingly and the practice of block grant funding allows them to gain from efficiency improvements. The predetermined hierarchical basis of funding simply says that funding is given based on the government's perception of the quality level, and even though the perception may have been created some decades ago, the status quo will remain. Under such a system, there is no encouragement for efficiency, cost reductions and value for money. With the proposal, the students will determine such and show by their preference of institution where they choose to pursue their course of study.

Widening Participation

It is widely accepted that the individual, as well as the society, benefits from an educated populace. As such, the individual, as well as the society, should share in the cost of education. The practice, however, of subsidising only those institutions that are publicly owned suggests that those who attend these institutions are the only ones who provide ser-vice to the nation. This is a fallacy. Consider also the fact that some of those who benefit from a subsidised education in Jamaica migrate to other countries, hence preventing the country from benefiting from its investment. In the United States, through the provision of scholarships and loans, students are assisted in attending private institutions for higher education.

With the channelling of resources through the SLB, participation would be widened, as there would be increased capacity for absorbing those persons who matriculate to higher-education institutions.

Equity, transparency, efficiency and widening participation are, therefore, the bases on which I give my support to the proposal from the minister of education for reforming the financing of tertiary education in Jamaica. Of course, there are other issues to consider, such as funding for research, quality assurance and the sustainability of programmes with high social and low private returns.

Funding for research should be separated from that of teaching, as is done in most Organisation for Economic Cooperation and Development countries. The University Council of Jamaica, or the proposed Tertiary Education Commission, should continue the role of monitoring the quality of the education services being deli-vered in Jamaica, and the SLB should provide loans only for accredited programmes.

The issue of sustainability arises out of the fear that those programmes with high social benefits but low wages may end up being neglected. This can be mitigated through the provision of scholarships and loan forgiveness for those persons who choose to work in these areas.

Dr Kofi Nkrumah-Young is associate professor, education, financing; vice-president, planning and operations, University of Technology, Jamaica. Email feedback to columns@gleanerjm.com.