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Financing higher education in Kyrgyzstan

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For a small country with a population of a little over 6 million, Kyrgyzstan has an awful lot of universities – 68 at last count. For comparison, Singapore (population 5.8m) has exactly half as many and El Salvador (identical population to Kyrgyzstan) has 26 universities.

As with many countries in the former Soviet space, the number of universities and institutes (collectively, higher education institutions, or HEIs) rocketed in Kyrgyzstan with the collapse of the Soviet Union in 1991. Even so, growth in the higher education system in Kyrgyzstan was phenomenally high, increasing by 325% in the first 15 years of independence. In neighbouring Kazakhstan, the increase over the same period was a more modest 197% (!).

Higher education growth in Kyrgyzstan came in both the pre-existing public sector as well as the nascent private higher education scene, and these days, the split between public and private HEIs is more or less 50-50.

With so many universities competing for students and limited state resources, Sputnik Kyrgyzstan recently published a fascinating interview with a senior administrator at one of the country’s leading institutions, Kyrgyz National University (KNU) on how the university gets and spends its money. This level of detail is often very difficult to glean from universities or Ministries of Education, so it adds quite significantly to our understanding of how higher education in a major state university in the former Soviet space is funded.

If cats did university budgets…

Income

KNU is a public university according to its history and current legal status, but in fact only gets 7% of its funding from the state.

As one of the biggest universities in the countries, they have over 17,500 students on their books and it’s these students who basically keep the university propped up. 92% of students are fee-paying, meaning that only a small minority are funded by the state (through various scholarships for e.g. high academic performance in secondary/high school or family/social status).

The biggest source of income by far is the 485 million som a year the university generates from tuition fees – equivalent to US$7m. Not bad considering that tuition fees didn’t exist as recently as 30 years ago.

From the state, KNU receives 40 million som a year (US$600,000) in the form of funding for students in receipt of government scholarships. The university allocates 60-70% of this on salaries and employment taxes.

Other income is minimal in comparison: 12 million som a year (US$170,000) in rent from its four dormitories, and 6 million som (US$85,000) from its residence in Issyk Kul (a popular lakeside holiday destination) and from eight dissertation councils.

In total, KNU is generating 543m som or US$7.85m in income a year.

Tuition fees and student numbers

Fees at KNU range from 31,000 som per year (about US$450) on ‘cheap’ courses such as physics, chemistry and Kyrgyz philology up to 46,000 som (around US$650) for economics courses in the Kyrgyz-European Faculty.

Each faculty has some wriggle room in setting its fees – some are planning to increase theirs by up to 10%, whereas others are actually decreasing them. This has been the case in physics and meteorology, where KNU has struggled to fill both fee paying places as well as state funded spots.

Total student numbers at KNU are considerably higher than at many universities, but have nevertheless dropped quite dramatically. Whereas around 28,000 students were fee paying 3-4 years ago, that number has almost halved to today’s figure of 16,330.

State sponsored places have also been reduced from 2,100 to 1,346. However, the university does not believe that the government will totally withdraw scholarship funding.

Expenses

As a state university, KNU has some limits on how it can spend the tuition fee income. They are required to allocate 80% to salaries and the remaining 20% for local taxes, staff/faculty travel, physical resources (furniture etc) and infrastructure maintenance.

A senior lecturer can expect to receive around 6,000 som a month from the state funding (a paltry US$85), which KNU then supplements depending on the lecturer’s teaching load and level of qualification (PhD/Candidate and Doctor of Science qualifications would entitle to you a higher pay grade).

The university doesn’t say what the total monthly pay packet looks like for senior lecturers, but the average monthly salary in Bishkek, Kyrgyzstan’s capital (where KNU is located), is US$285. Let’s hope that senior lecturers are not too far off that figure.

KNU pays 144 million som (US$2m) to the state in various taxes each year, as well as a whopping 564 million som (US$8m) for electricity, water, and communal and other services.

I can’t calculate the total expenses per year as it’s not clear from the article whether the 20% of fee income in taxes is included in the 144m figure noted in the previous paragraph. And either I’ve misunderstood someting or there’s a typo in the services figure: if it really is 564m som a year, that’s more than the total income and presumably would mean the university would run very quickly into bankruptcy.

Those queries aside, the availability of data like this sheds important new light on higher education financing in Kyrgyzstan. For me, the big takeaway is how little of the university’s funding actually comes from the state despite its appellation as a public university and, as a result, just how dependent KNU is on tuition fee income and therefore students’ continued desire to study at the university.

International students in Kyrgyzstan

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A great infographic published by Russian media agency Sputnik offers a visual breakdown of Kyrgyzstan’s 20,000 international students. I’ve reproduced the infographic below but it is Sputnik’s and the original post can be found here.

For non-Russian readers, here’s a summary:

  • Kyrgyzstan’s educational ‘market’ is specific to its geographic and linguistic neighbours
  • India is by far the biggest sender of international students to Kyrgyzstan – they make up almost half of the total international student population
  • The next largest sending countries are former Soviet neighbours Kazakhstan, Tajikistan, Uzbekistan and Russia
  • Students also come from Pakistan (which sends almost as many students as Russia – around 1,500) and a small number from Turkey, China and Afghanistan
  • Five higher education instutitions (HEI) host over 1,000 international students, three of which are medical institutes. South Asian students have long been attracted to Central Asia’s medical education and it is likely that the students from India and Pakistan make up the majority of international students at these institutions
  • The most popular HEI for international students is Osh State University. This is interesting as it’s in the south of the country, far from the capital Bishkek (where the majority of Kyrgyzstan’s 50+ HEIs are located) and because it’s a multi-faculty university not a specialist institute (as per the medical institutes noted in the previous point)
  • International students mainly head to HEIs where education is free (Manas Kyrgyz-Turkish University) or where fees are relatively low ($900 p/a at Osh State, around $1,700 p/a at other popular HEIs). The American University of Central Asia, which atttracts around 400 international students, charges significantly more – around $6,300 p/a.

Sputnik_intlstudents_KY_infographic_2019

And before you go, check out this 2015 infographic, also from Sputnik, for another well crafted visualization of Kyrgyzstan’s higher education sector.

Higher education reforms in Uzbekistan

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Once the ball of higher education reform has started rolling, where will the chasing end?

In an interview with Gazeta.uz [ru] published on 18 September, Uzbek Deputy Prime Minister Aziz Abdukhakimov offers some insights into higher education reforms in the country. The list is impressively long, indicative of broader reform trends taking place across government and in society as a whole.

In higher education, I’ve already flagged Uzbekistan’s growing interest in cooperation with neighbour and former arch-enemy Tajikistan, the release of the first national university ranking and the role of higher education in the country’s international relations.

Now let’s add to those efforts the reforms described by Abdukhakimov earlier this week:

  • Autonomy – there’s a proposal for Rectors (Vice-Chancellors) to be elected by faculty under an open vote. This makes the state one step further away, and the open voting is intended to avoid the possiblity of what Abdukhakimov calls ‘clan politics’ entering the higher education system. However, Abdukhakimov notes that the state will retain the right to veto the choice of Rector in state universities, so let’s not get carried away with too many ideas about academic freedom and the like;
  • Decentralization – universities are to bring in their own managers to deal with finance and local administration, and should establish governing bodies (usually called boards of trustees in former Soviet systems) to oversee their affairs;
  • Expansion – universities will be allowed to recruit more students (within the limit of the number of faculty they have and capacity of their facilities – classrooms, dormitories etc) and offer a wider range of course ‘in order to respond to the demands of the market more flexibly’;
  • Income – connected to the point on expansion above, universities will be able to admit students who did not achieve the required admissions test score by charging them tuition at between 1,5 and 3 times the amount of the regular fee. Whilst Abdukhakimov does not encourage universities to admit students who did not meet the requirements [ru], it’s hard to see how the prospect of extra income that these ‘super-contract’ [ru] students will bring with them will deter HEIs;
  • Privatization – the legal system will recognize private higher education institutes (HEIs) and the government is planning tax breaks and other incentives to encourage more such HEIs to open. The government also wants to encourage more public-private partnership HEIs e.g. by offering state-owned buildings for privately run use;
  • Internationalization – the country wants more international students and has ambitions – rather like Kazakhstan – to become a regional education hub. Abdukhakimov asserts that these international students will then return home to be brand ambassadors for Uzbekistan, ‘which is very advantageous for the country’s image’;
  • Choice – new admissions processes will be introduced allowing prospective students to apply earlier and to more HEIs than the current system permits;
  • Access – the state will fund a small number of students from disdvantaged or rural backgrounds to attend privately run universities (a grant system already exists in publicly funded HEIs). Former military personnel will be able to get funding from a specific grant scheme rather than applying to the main grant pot;
  • Commercialization – the state is going to invest in 80 HEIs and provide free places so that they can turn into what Abdukhakimov calls ‘Universities 3.0’. Beyond teaching and research (as making up 1.0 and 2.0 if you want to think about it like that), these HEIs will emphasize the commercialization of knowledge – so I’m imagining the government is thinking of US models like Stanford or MIT that has many highly successful spin-off companies and opportunities for students to be involved in social and business entrepreneurship.

The interview is followed by a fairly lively discussion which mainly focusses on the financial aspects. The idea of ‘super-contracts’ [ru] is new and is quite clever if you think about it from the government’s point of view. By legitimizing practices they know are already happening (I too have heard about this in other universities in neighbouring countries – e.g. you pay a ‘double contract’ – two years’ fees – for the first year of study if you didn’t quite make the grade), the state gets to take the credit for giving HEIs more flexibility and income, all the while arguing that this low stakes because if the students aren’t smart enough to make the admissions cut-off, they’ll probably drop out – but not before paying at least a year’s worth of fees. But on the other hand, as one commentator suggests: “The name ‘super-contract’ makes it sound like an achievement, but really it’s just a straight path into university for rich idiots’.

There’s an awful lot to digest in this short summary of the Uzbekistan government’s plans, and it’s an exciting time for those of us (OK, for me!) interested in how higher education is changing in the Central Asia region. Almost all of what Abdukhakimov is proposing puts Uzbekistan squarely in the growing group of nations seeking to conform to what they see as ‘global best practices’ in higher education, which basically means attempting to emulate the US research university system and neoliberal funding models where higher education is seen as primarily a private good.

Many of the ideas for reform are also underway in neighbouring countries, although as far as I know, the ‘super-contract’ is unique to Uzbekistan. I’m planning to discuss the prospects for regional integration in the Central Asian higher education systems in a future blog post, and something I will consider there is the extent to which the convergence on the type of reforms being pursued helps or hinders those prospects.

There’s much more to say about the direction Uzbekistan is choosing to travel in when it comes to higher education, but that’s enough for today.

Planning ahead in Kazakhstan

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The Ministry of Education in Kazakhstan is about to launch a new savings plan to help parents save towards the cost of their children’s higher education. After an initial deposit, subsequent instalments can be variable both in amount and frequency. On top of the bank’s interest rate, the government has committed to add in 5-7% as a ‘premium’. Both the flexibility of the options for saving and the government premium act as strong incentives to make use of the facility and I imagine it will be popular, particularly amongst a) middle and high earning families and b) families with a history of higher education participation. But in a country where great value is placed on education, perhaps it will also motivate those outside of those two obvious groups to make their contribution towards their family’s future.

I think this is a great initiative and credit is due to the Ministry of Education. It shows a country that is comfortable with (or at least, accepting of) the concept of families contributing towards the cost of higher education and there is a lot that the UK, still licking its wounds from the introduction of GBP£9,000pa fees, could learn from.

Here’s the full story from Tengri News http://en.tengrinews.kz/finance/In-April-2013-Kazakhstan-to-launch-education-savings-plans-17770/ (copyright):

Thursday, 14.03.2013, 13:12
In April 2013 Kazakhstan to launch education savings plans

Zabira Orazaliyeva, Financial Center LLP President. Photo courtesy of rus.azattyq.org
In April 2013 Kazakhstan will launch education savings plans, Ms. Zabira Orazaliyeva, Financial Center LLP President, said at a press-conference at the country’s Education Ministry March 14.“Any citizen of Kazakhstan can open a savings account with an eligible bank to accumulate funds to cover his or her children’s tuition fees in future”, Ms. Orazaliyeva said.

According to her, the major distinguishing feature of the state-run education savings plans is that the state offers a premium making up 5-7% of the amount [depending on the social status of the depositors] in addition to the bank’s interest on the deposited amount.

“Halyk Bank, Kazkommertsbank and Temir bank are among the first banks to participate in the state-run program. A number of other major banks also meet the standards to participating banks”, she added.

All the data on the participating banks will be available at the Financial Center LLP’S website.

Tengrinews.kz reported mid-January that Kazakhstan’s President had enacted law on the state-supported education deposits to be introduced as a tool to help families accumulate funds to cover their children’s tuition fees.

According to the law, depositing a certain amount in the name of their child, parents enjoy both the bank’s interest and a special premium from the government.

The minimum obligatory amount to be deposited in 2013 shall be 4854 tenge ($32). The amount of all the following installments and frequency thereof shall be at the discretion of depositors. The premium offered by the government shall make 5%, with the figure standing at 7% for some categories of population.

When presenting the draft legislation in the country’s Parliament, the Education Minister cited an example of how the scheme will work: “”Let’s assume a family open a deposit in the name of their 10-year-old child. The first deposited amount makes up 5000 tenge ($33), with all the following monthly deposits standing at 15 000 tenge ($100). By the time the child turns 17, the amount of the deposit will make up 2 075 000 tenge ($13 800), with 60% of the amount being the depositors’ money, 23% provided by the bank as an interest on the deposit and the other 17% provided by the government as a premium”.