20 January 2022 17:45

Money for higher education: how to stabilize the financial situation in universities?

The COVID-19 pandemic continues to change the world and all sectors of the economy. In particular, the pandemic has exacerbated problems in the field of higher education funding.

Scientists from the Taras Shevchenko National University of Kyiv sought a solution to this problem. The project “Financial Stabilization of Classical Universities in the Consequences of the Global Consequences of the COVID-19 Pandemic” won the call “Science for the Security of Human and Society” of the National Research Foundation of Ukraine and received funding of one and a half million UAH.

The supervisor of the project is Yuliia Petlenko, Associate Professor of the Department of Finance, Faculty of Economics of the Taras Shevchenko National University of Kyiv.

“Scotch tape” technique

Before creating a theoretical model of financial stabilization of universities scientists analyzed the current situation. The survey confirmed that online studying requires a change in investment funding priorities and the government has unfortunately not been able to provide teachers and students with the necessary tools for distance studying quickly.

Of course, the organization of online studying is just one of the “litmus papers” of the situation in classical universities. Stabilizing this situation requires improving the sources of funding both public and private, as well as the development of new hybrid sources of cooperation based on them.

Minimum is not enough!

Another problem is determining the price of studying. The introduction of the principle “money follows the student” changed the rules of public procurement and the financing of free economic zones. Applicants choose a specialty and a university, thus determining where the funding will go. Since 2020, the indicative cost of certain specialties has been established, i.e., the minimum price below which the cost of education cannot be reduced, but this minimum is not enough for the developing of university.

Researchers have improved the formula of indicative cost and developed recommendations to move to the formation of the full cost of studying gradually, in six stages.

What does the state finance?

According to researchers, it is also necessary to clearly answer the question: what does the state finance? What level of specialist wants to get “on the way out” from the HEI: international, national or local?

The goal should be clearly defined: if we are talking about specialists of the international level, the formula for allocating costs of studying should consider the rating factor (for example, QS position) so that it encourages universities to improve educational and research results.

But local companies, corporations, communities, dual education and lifelong learning programs need to be involved in studying for regional markets.

Which way to go next?

We need to think carefully about how to give the financial autonomy to HEIs ­­­– said the supervisor. – The best universities seek such autonomy, but our financial market is not so well developed that institutions can be, for example, corporatized (to distribute property and other assets). In addition, the universities themselves and the society are reacting to this topic very sharply. The question immediately arises: will the distribution be transparent? Who will get the property?

–  The topic we raised is very difficult – said Juliia. – But it is impossible to leave everything as it was before. I am convinced that it is important for us to preserve the existing assets and consider (without copying!) International experience.

Funds for the development

According to the project executors, endowment funds can become one of the tools for the development of universities. Such funds operate in the best universities in the world and funding goes to the development of the institution, updating the material and technical base, libraries and so on.

Institutional legal frameworks need to be created for the work of endowment funds. If everything is done correctly, the system will work in 5-6 years. Pilot projects will be launched at the highest-ranked universities and then others will join.

The project was implemented by a team of experts from various fields of science: computer technology, cybernetics, mathematics, sociology, economics etc. During the work the team “grew”, defended two doctoral and one candidate’s dissertation.

– We are grateful to the NRFU for the opportunity to perform important research – said Juliia. – Such grants give the opportunity to go abroad, to study problems our colleagues face with and to see how they solve these issues.

Colleagues who plan to submit their projects to grant calls (both international and national), the scientist advises to start with the formation of the team. It should be a team of like-minded people, where it is clearly planned what contribution is expected from each member. In addition, you should not be afraid of important and topical research.

Svitlana GALATA

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