Last week, Thanh Nien Newspaper had a special topic on finance for higher education (HE), in which it pointed out the current situation of HE revenue depending on tuition fees, while experts all agree that the state budget (NSNN) should be the main source of finance. Mr. Hoang Minh Son, Deputy Minister of Education and Training, had a discussion with Thanh Nien about this issue.
Deputy Minister of Education and Training Hoang Minh Son
STATE SPENDING ON UNIVERSITY: VN 35%, WORLD 66 - 75%
In response to the World Bank (WB) expert group's comment that Vietnam can be considered "an exception" (in terms of state budget investment in higher education) as it is one of the countries most dependent on tuition revenue, Mr. Son shared:
It can be said that along with the promotion of university autonomy and the socialization of higher education, university finance has been a topic that has been discussed quite a lot and has attracted special attention in recent years. The recent analysis of university finance by the WB expert group, partly based on data previously published by units of the Ministry of Education and Training, partly based on the results of the group's survey at a number of higher education institutions, has continued to clarify the current situation and supplement some appropriate recommendations (although some of the collected and surveyed data are not representative enough).
Currently, there are no official calculations on the total budget and budget structure for higher education institutions. According to the state budget estimates provided by the Ministry of Finance and data surveyed by the Ministry of Education and Training, the average expenditure per student in 2021 is estimated at about 25.5 million VND/year; of which the average state budget expenditure is approximately 8.8 million VND/student, corresponding to a proportion of about 35%. This is the case for the entire system, but if we consider schools with a high level of financial autonomy, the proportion of the state budget will be much lower, as reported by the expert group.
According to 2019 statistics from the Organization for Economic Cooperation and Development (OECD), the average expenditure per student in the OECD is approximately 18,950 USD and the average in the EU is approximately 18,350 USD; of which the state budget accounts for an average of 66% in the OECD and 75% in the EU. Some countries have a proportion of state budget expenditure equivalent to or lower than Vietnam such as: UK (24%), Japan (32.6%), Australia (33.7%) and the US (35.7%). However, the expenditure per student in these countries is very high (20,000 - 35,000 USD/year).
The low proportion of state budget expenditure for universities means that universities will find it difficult to follow the strategic directions and goals set by the State. As many experts have analyzed, when a university depends heavily on tuition revenue, it will inevitably focus on opening majors, enrolling students and training majors and programs that are easy to attract students, have low costs but are highly effective financially. As a result, many science, engineering and some other specific majors, especially at the postgraduate level, which are essential for the long-term, sustainable development of the country, will face difficulties in enrollment without appropriate investment and support mechanisms and policies from the State. In addition, ensuring social equity and access to higher education for disadvantaged groups is also an issue that needs special attention.
Investing in university education is for sustainable development, high investment efficiency; the more investment, the greater the benefit.
C. LACK OF COORDINATION IN POLICIES HAS REDUCED INVESTMENT
In recent years, the Government as well as the Ministry of Education and Training have both said that if we understand autonomy as self-financing, we are misunderstanding autonomy, but in reality, autonomous schools still have their regular budgets completely cut... What do you think about the many opinions that granting autonomy and then cutting regular expenditures of public universities is something that is not seen in international practice?
The purpose of granting autonomy to universities is to better promote the dynamism and creativity of universities, improve university governance capacity and promote healthy competition in the higher education system, thereby increasing the investment efficiency of the State, learners and society. In fact, in recent times, the reduction of regular expenditures has forced higher education institutions to be more proactive in innovating their organization, governance and operations to increase competitiveness, seek resources from society, and at the same time use these resources more effectively. The report of the Ministry of Education and Training at the 2022 University Autonomy Conference, as well as a number of recent surveys by a group of WB experts at leading higher education institutions in implementing autonomy, have also clearly shown this.
One of the major policies of the Party and the State is to promote socialization to increase resources for public service sectors, including higher education, but there has never been a reduction in the state budget for higher education. The Law amending and supplementing a number of articles of the Law on Higher Education (Law 34) has stipulated the State's policy on developing higher education, including the allocation of budget and resources for higher education according to the principles of competition, equality, and efficiency through investment expenditures, research and development expenditures, research and training orders, scholarships, student credits, and other forms.
Thus, the allocation of the State budget for higher education has been shifted from mainly supporting regular expenditures to investment expenditures, expenditures according to competitive tasks and expenditures to support learners; this is not uncommon in countries around the world. However, in reality, the innovation of this financial mechanism and policy has not been implemented synchronously. The reduction of regular expenditures without increasing the budget through investment, ordering and task assignment mechanisms has caused many difficulties for higher education institutions.
Tuition fees still have to increase
In the context that the state budget cannot increase significantly, it is inevitable that tuition fees must be increased according to a suitable roadmap. This requires many synchronous policy solutions from both the State and higher education institutions. One of the most effective solutions is to continue to promote and innovate credit policies and student scholarships, targeting training subjects and sectors, and increase the proportion of students receiving financial support, especially students in science, engineering and some other specific sectors.
INCREASING INVESTMENT IN HIGHER EDUCATION IS AN URGENT REQUIREMENT
Recently, many opinions have suggested that the State needs to increase investment in higher education. In your opinion, is this a feasible requirement?
Increasing investment in higher education from the state budget is an urgent and inevitable requirement. Whether this is feasible or not depends first of all on the investment perspective, the consensus of state management agencies and the whole society on the benefits of investment in higher education. As mentioned, investment in higher education is investment for sustainable development, high investment efficiency; the more investment, the greater the benefits, for both public and private interests.
The national master plan has set a goal that by 2030, Vietnam will become a developing country with modern industry, high average income, economic growth based on science - technology, innovation and digital transformation; among the top 10 countries with the best higher education systems in Asia with a university student ratio of 260 per 10,000 people.
Meanwhile, the statistical indicators of university graduates and the scale of students per population, the level of state budget expenditure on higher education per capita, per GDP or per total state budget expenditure on education and training or science and technology are all much lower than those of other countries in the region and in the world. These are huge challenges for Vietnam's higher education, which must both increase the scale and increase access to higher education for all people, and at the same time improve the quality of higher education associated with the development of science and technology.
In order to increase the quantity and quality of highly qualified human resources and the country's scientific and technological capacity, in addition to the innovation efforts of higher education institutions, it is necessary to increase investment resources, especially from the state budget and society. According to data provided by the Ministry of Finance, the state budget for higher education in the period of 2018 - 2020 reached 0.25 - 0.27% of GDP (4.3 - 4.7% of total state budget expenditure for education and training); in 2020, the estimate was 16,703 billion VND but the actual expenditure was 11,326 billion VND. Also in that period, the total state budget actually spent on education and training was only between 16 - 16.8% of the total state budget. Thus, if the actual state budget expenditure on education and training is raised to 20% of the total state budget, then regulating a part of it to double the current proportion of expenditure on higher education (ie about 0.5% of GDP) is completely feasible.
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