Abstract
Inadequacy of resources and poor governance are factors constraining improved quality of Indian higher education outcomes. This paper analyses the issue of funding from two perspectives—what is being funded and how it is funded. While the former issue pertains to the funding of university inputs as compared to the university outputs, the second issue looks at how the funds are released to the universities. In some of the instances, funds are transferred directly to the universities, and in other instances, it is transferred through the students. This paper takes forward the framework presented by Jongbloed (Public–private dynamics in higher education: expectations, developments and outcomes. Transcript, Transaction Publishers, New Brunswick, USA, pp 113–138, 2007) in a 2 by 2 classification of the two dimensions of mode of funding. It discusses various such interactions between the state and the market by giving examples of the self-financing courses and the online courses, the development of the credit market, the voucher system, performance-based funding and the public–private partnerships (PPP) in addition to the recently announced policy initiative by the government, the Higher Education Funding Agency (HEFA).
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Notes
- 1.
Conceptualization of quality of higher education is a difficult task. Often in the public discourse, the non-featuring of the Indian universities in the global ranking tables is cited as the reason for poor quality.
- 2.
According to the National Employability Report 2013, employability was less than 25% across the majority of the job functions with graduates from science, commerce, arts, etc.
- 3.
The demand side factors are responsible for weakening of the demand for graduates because of rising intensity of capital-intensive technologies and high-skilled technicians at the expense of medium-skilled ones.
- 4.
In a study conducted by NUEPA (Bhushan, 2010), found out that as expected, central universities are the cheapest. Private deemed universities charge the highest. Maximum percentage of the programmes in applied disciplines and general was in the range of Rs. 50,000 to Rs. 100,000. Medical are the costliest with 23% above Rs. 200,000. In south, average fees charged are the highest at Rs. 78,000 followed by East at Rs. 57,825. West charges the lowest at Rs. 16,138.
- 5.
The link between efficiency and excellence is somewhat nebulous and tenuous.
- 6.
There arises an issue of prioritization of choice of courses vis a vis choice of institutions. Because of the eligibility criteria for seeking admission into the HEIs, the choice making would neither be free nor should it be so (Chattopadhyay, 2012).
- 7.
The neoliberal approach to policy making emphasizes on these two types of efficiencies.
- 8.
Outstanding loans have grown at a CAGR of almost 30% since 2005 while education loan accounts have grown from 0.25 to 3 mn at a CAGR of 32% during the same period. Education loans account for 11% of total enrolment which was only 2% in 2002–03 (Re-imagining Higher Education in India, Yes Institute, 2016).
- 9.
Transaction costs such as the cost of information, screening and collection and defaulting are high for educational loans. No possibility for collateral.
- 10.
Loans are required to be paid back in the form of interest and capital repayments if the income earned exceeds a certain limit. In case the students remain unemployed or start their career with low.
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Chattopadhyay, S. (2023). Mode of Financing of Higher Education: An Assessment of the Possibilities. In: Varghese, N., Panigrahi, J. (eds) Financing of Higher Education. Springer, Singapore. https://doi.org/10.1007/978-981-19-7391-8_2
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