21 October, 2017

Should Sri Lankan Students Pay A Fraction Of Their University Costs?

By Kumar David

Prof. Kumar David

Should Sri Lankan students pay a fraction of their university costs? – University is beyond reach of US, UK students

University education is beyond the reach of middle or working class families in the US and the UK, so students get by with large education loans. The average tuition fee at Harvard is $50,000 per year for four years; add to that living costs, accommodation and books. State universities cost over $20,000 a year for four years. At a low cost US community college a two or three year vocational oriented programme will set a student back about $7,000 per year in tuition fees. Medical schools are far more expensive. A graduate will begin life with an average debt of $35,000; the highest may be $200,000. Student debt takes 7 to 20 years to pay off. Many fall behind or walk away from unbearable debt obligations. The cumulative US student debt burden at the end of 2016 was $1.4 trillion ($1400 billion) and widening; it exceeds by double the outstanding credit card debt ($620 billion). The number of indebted graduates was 44 million at end 2016.

After adjusting for population, income and prices the situation in the UK is not much better. At end 2016 outstanding student debt amounted to GBP 100 billion and is forecast to double in six years – unless a Labour government is elected soon. The average student in the UK walks out of university with a higher debt (GBP 32,000) than his American counterpart’s average of $35,000 (GBP 28,000). By 2011 UK students were paying 66% of university costs – probably over 70% now – out of their pockets and from loans. The cap on tuition fees now at GBP 9000 per year is set to go higher. The sharp rise in fees was initiated by Tony Blair in 1998. Blair, a devotee of transplanting mantras of the private sector into public sector institutions, put an end to low cost higher education and jacked up fees, which have step by step risen to GBP 9000.

The Academy in the Marketplace

Most disconcerting is that the university has become a business; Plato in his Academy would shudder! Not just private for-profit institutions, but not-for-profit and public (state) universities too have to put money and success as a business venture before learning, teaching, fashioning of an all-round person and love of knowledge. The most important department in university administration is marketing and student recruitment, whatever name it goes by. Deans and Heads of Department are under pressure to enrol a sufficient number of fee paying students. Swarms of slick recruiters are sent out by British and Australian universities to conduct recruitment jamborees, seminars and the like in Malaysia, Hong Kong, China, Indonesia and the Middle East where pools of eager, not necessarily rich, parents and students are spotted. In Sri Lanka, the Education Supplements in the Sunday Times advertise colleges and courses with the same bluster as mobile phone and kitchen appliance pushers. Foreign students are a prized resource in Britain and Australia because they are charged much higher fees which helps subsidise a range of university activities.

You could well ask what is wrong with a university pushing hard to earn as much money as it can. The answer is not straightforward in an age where governments are slashing funding and the number of school leavers eligible to enter tertiary education is increasing. If I recall correctly, the total number of university students worldwide in the 1960s was two million, now it is about 200 million. Thanks to advances in society and industry in the post-war period, the polish needed to break into higher social circles and the skillset essential for employment has become sophisticated. However, while the costs of providing higher education have been rising steeply, the contribution by the state has been edging up only modestly, leaving a large gap to be bridged by student fees.

As in business and banking, the top rung of university administrators are not doing badly at all. The salaries of Vice Chancellors in the US, UK and Australia are well above the inflation trend line and match rising tuition fee trends. Colleges have provosts or vice-presidents and departments geared for local and overseas marketing.  There are reasons for the price surge: overpaid business oriented vice-chancellors or presidents, too many teachers and administrators and luxury dorms. As part of their marketing strategy, colleges are promising many outside classroom services; amenities include mental health services, counselling and recreational centres. It’s an advertising gimmick as in all salesmanship; convince buyers that they cannot survive without the inessential.

The resource gap in the US is rising exponentially

The resourse gap in the US is rising exponentially

At some US private colleges 58 percent of each dollar goes to student and institutional support services, compared with just 42 percent spent on instruction. On many campuses, expansion of student services has driven a 30 percent increase the higher education workforce. Students are shouldering much of these costs as the state cuts back. It’s a vicious circle with no visible way out in the US, though it may be possible to cut the Gordian knot in the UK. 

Universities in continental Western Europe do not levy tuition fees, or if they do the fees are small, and for this reason they are free of a market ethos and the academic atmosphere is healthy. I have read about, seen documentaries or had personal experiences as teacher or researcher in Germany, Sweden, Switzerland, Norway and the 1960s UK. If I may make a personal statement, time spent in a university free of market place morality is a pleasure. My colleagues in Hong Kong, US and latter day UK would enjoy liberation from this bazaar. But the system does not allow them to ignore raising money for the university kitty.

Should tertiary education be entirely free?

So far I have been negative about high tuition fees, but does that mean entirely free education, as we have got accustomed to in Lanka, is a good thing? Certainly free education, from the 1940s, has made high literacy and a degree of social equivalence across classes and regions, possible. However from the difficulties created by exorbitant tuition fees one cannot infer the other extreme, a perpetual 100% free system, is best. There are to my mind three reasons why a small fee, for example to recover 10 to 20% of university gross expenses, should be considered.

The first is that gratis university education has given birth to a generation of student hooligans who do not value what society gives them. Hence while I support the principle of allocating 6% of GDP to education in the long run, a split of 5.5% from the state and 0.5% from fees may be good. I am persuaded that this will inculcate an appreciation of the benefits of edification over hooliganism.

The second reason is that we have come a long way from the 1940s and there is more money in the country now, poverty is much reduced and even lower middle class families in city and village, and most working class and peasant parents, can afford a fee of say Rs 36,000 per annum. Monthly Rs 3000, is three day’s wages of a casual worker. Eighty percent of families can come up with the money without difficulty, and will do so given the high social premium of university education. Rs 36,000 each from 50,000 students sums to Rs 1.8 billion, which is 0.15% of GDP (Rs 12 trillion). In round numbers, right now, the budget allocates about Rs 170 billion, or 1.4% of GDP, to higher education. I am keeping the 5.5%:0.5% ratio at the back of my mind as a guideline.

A third reason is that if students pay part of their education costs they will be more quality conscious and demand better teaching, higher quality teachers and better facilities. Right now they take anything dished out to them lying down. I grant that the issue is complicated and controversial and not easy to resolve.

On a separate note an interesting point is whether not-for-profit yields a better outcome than for-profit. I know of no comprehensive comparative study of university education, but there is a very thorough investigation of the US healthcare industry by Zack Cooper of Yale University, published in Yale Insights. I quote from “Why Is Healthcare So Expensive?” of 12 February 2016.

Quote:

“Question: Are there difference between nonprofit and for-profit hospitals in terms of their prices?

Answer: We found, consistent with the wider literature that not-for-profits behave identically to for-profits. That is, their prices are equally high, and they are also likely to charge higher prices when they have monopolies. Given that nonprofit hospitals receive $30 billion annually in subsidies in the form of tax exemption, I think we have to ask tough questions about whether or not we should be giving not-for-profit status to these large hospitals”.

End Quote.

If the results for the higher education sector are consistent with those of the healthcare sector this calls for mulling over some considerations. What if not-for-profit and for-profit are no better than each other in the end results they achieve, and are equally expensive once the costs to the state are factored in? Where exactly does this leave us?

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Latest comments

  • 6
    1

    Yes, it is about time that people paid for what they get ,such as education and health services. As the prof says, ” gratis university education has given birth to a generation of student hooligans who do not value what society gives them”.
    Now we have not only hooligan students but hooligan “doctors”. None of these deserve the free education they received.
    We also must ask whether there actually is such a thing as free education, when even poor parents are prepared to spend thousands on tuition factories. Why not ask them to pay the schools for better service, since they can obviously afford it?
    The really poor can be given subsidies based on factors like electricity and phone /water bills, not bogus Samurdhi statistics.
    Finally, has free education given us the desired results? How many global CEO’s or scientists of global repute have we produced in comparison to even India? Look at the quality of our politicians. Is there even one Shashi Tharoor to be found?

    • 3
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      OC
      School education should desirably be universal and free as in most countries. People here seek private tuition because the schools are failing in their duty.
      *
      Higher education should be paid for, but without denying access to those who are eligible but financially handicapped. A system of education loans repayable on employment is possible as long as there is a good mechanism to recover the loan.
      The loans themselves could be on varying terms: from softer loans for those remaining to serve the country to loans at commercial rates for those seeking greener pastures.
      The bigger problem is that the university system is not based on a sound plan designed to make graduates ’employable’. Many who want to follow professional degree programmes aim to find a job abroad. Why should they be subsidized? (The Compulsory Service Act of 1964 was not a bad idea.)
      *
      We are obsessed with the notion that higher education is only university education. That should change. Any post-school education that enriches the abilities of school leavers should be treated as higher education.

      • 2
        0

        S.J,
        “Many who want to follow professional degree programmes aim to find a job abroad. Why should they be subsidized? (The Compulsory Service Act of 1964 was not a bad idea.)”
        Yes,very true. Anyone who enjoyed the benefit of free higher education should be made to serve in SL at least 10 years, or pay back the cost if they want to leave.
        Also, we need to get over this “doctor/lawyer/accountant” syndrome. Parents need to realize that being a welder/carpenter/electrician etc is not infra dig . Some of these earn more than new doctors/lawyers , besides not wasting 6 or more years studying.

  • 5
    1

    There is nothing called a free lunch. Someone pays for it and in SL the tax payers fund it.

    At a point govt will find it difficult to fund both health and education the way it is done now. Recommendation is not to cut or reduce the GDP % allocated to health or education but allow quality private health care and private education to compete with state sector.

    Imagine if we did not allow private primary and secondary education in the country? Quite a few popular schools in Colombo are privately managed and run well and doing great spice to society and country. They had swimming pools and high quality auditoriums well before the govt schools. Outstanding young men and women have been educated in these schools without being a burden to society and tax payer.

    Atleast at university level, the students must pay atleast 50% of costs and recover full cost if they leave the country within 10 years of graduating.

    FUTA the trade union which boasts of producing almost 50% unemployed graduates will oppose this. They will not want competition and will oppose they being held accountable for graduates being unemployed.

    At some point the govt must have the courage to push through critical reforms and crush some of the trade unions just like the way they did with CPC unions recently.

    Happy to note that govt is willing to set up five institutions like SAITM and also is in the process of establishing universities like MIT and Berkeley. Also the SAARC fee paying medical university.

    Wow what a refreshing thought !!!

  • 0
    1

    There is nothing called a free lunch. Someone pays for it and in SL the tax payers fund it.

    At a point govt will find it difficult to fund both health and education the way it is done now. Recommendation is not to cut or reduce the GDP % allocated to health or education but allow quality private health care and private education to compete with state sector.

    Imagine if we did not allow private primary and secondary education in the country? Quite a few popular schools in Colombo are privately managed and run well and doing great service to society and country. They had swimming pools and high quality auditoriums well before the govt schools. Outstanding young men and women have been educated in these schools without being a burden to society and tax payer.

    Atleast at university level, the students must pay atleast 50% of costs and recover full cost if they leave the country within 10 years of graduating.

    FUTA the trade union which boasts of producing almost 50% unemployed graduates will oppose this. They will not want competition and will oppose they being held accountable for graduates being unemployed.

    At some point the govt must have the courage to push through critical reforms and crush some of the trade unions just like the way they did with CPC unions recently.

    Happy to note that govt is willing to set up five institutions like SAITM and also is in the process of establishing universities like MIT and Berkeley. Also the SAARC fee paying medical university.

    Wow what a refreshing thought !!!

  • 4
    6

    Prof. Kumar David: did you pay any moey, Except School fees those days, for your free education ?. How much you have paid back to Sri lanka. IF some one dig out your Geneology, are you really Sri lankan. Because, there are Tamils who were born outside, including their parents, Sri lanka, but fight for eelam in Sri lanka. What we have is western system of education. It is a failure. compare it with other countries and see.

    • 3
      2

      Dear Jim,,
      I don’t know whether you understand or but, but for yours and mines school and uni educations are paid our parents..It is not provided by Gods.. It is financed by TAXes paid by all over parents when they buy Bread, Sugar, etc.. May be part by foreign TAX payers, which is unfortunate..
      However, in year 2000, this kind of free higher education utilizing TAX payers money proved to be a big failure and waste of resources.. If our children have to pay or liable to pay through non-interest loan for 30~50% cost of the education, then we, the payers, academics, and bureaucrats have to make sure again we, the clients, get something tangible for the money we spend/owe.. This is how most of Universities in the West are profitable to the whole society as an investment. ..

  • 3
    1

    The way forward is almost free education through the internet. Internet has become a gold mine in knowlege and education.

    One famous Indian interlectual in the US Salman Khan started free eduction on the internet – Khan Academy: The man who wants to teach the world, and even Bill Gates’ children used it.

    It is time to make professors in general redundant except in some special fields whare expert guidance is necessary.

    Also it’s tome for students to explore such facilities for almost free education.

    Innovation is the key break this vicous circle of expensive eduacation.

    • 1
      1

      Interesting advice Thiru!

      I wonder what Professor Khan lives on; even fresh air and clean water are expensive these days.

      As my grandma said to dad when he complained about my school fees, “if your think education is expensive, wait and count the cost of ignorance”.

      Thiru, Altruism can only do so much. Even academics deserve a decent wage.

  • 3
    1

    free education should be restricted to A level
    scholarships should be given to a certain number for higher education
    other students should pay
    free education is free for students but not free for taxpayers who shoulder the burden
    in how many countries is higher education free?

  • 2
    1

    Prof Kumar David says “…………..The first is that gratis university education has given birth to a generation of student hooligans who do not value what society gives them………….”
    A commenter used the words “unsympathetic elitism” to describe the opinions of Prof Asoka N I Ekanayake in a recent CT article. Kumar’s suggestion is “bloody fascism”. It is shortsighted bordering on clinically blind.
    The man goes on “…………….most working class and peasant parents, can afford a fee of say Rs 36,000 per annum. Monthly Rs 3000, is three day’s wages of a casual worker. Eighty percent of families can come up with the money without difficulty, and will do so given the high social premium of university education……..”
    Kumar David tell us: Will the casual worker go without food three days of every month? Is use of the words “high social premium of university education” appropriate? Are all university graduates employed?
    For example, student protests contributed to the end of Vietnam war and to the end of apartheid in the then South Africa. Protesters were suppressed during the invasion of Iraq but you know what happened.
    I suggest the problems of education in Lanka is caused by the prevalence of corruption, nepotism and culture of impunity. Teaching has become yet another area of political connection.
    Fees No fees will become a political football like the language/religion divide.
    Kumar David, you have started writing what certain group want to hear. Pathetic.

    • 0
      0

      K.Pillai, can I correct you.The daily wage of a casual worker today is in the range of Rs 1800-2000.To replace one tile in my house I was charged Rs 5000.00 for two, one to carry the tile and the other to set the tile.

      What KD says is correct.

  • 4
    1

    Having studied and/or taught at many Universities (in Sri Lanka, UK, Canada, Australia, India & finally USA) for over 45 years, I agree with most of what Professor Kumar David has stated. When I mentioned a similar tuition fee at a public lecture I gave at the Institution of Engineers in Sri Lanka, a few years ago, the reaction was mixed. (I understand that-very good probability that any ruling party will lose the next election!). I suggested giving interest free loans to all needy students & scholarships to the brightest. The tuition money can be used to improve the Universities. It is true that we had free higher education in the past. But, times have changed, most countries also had free higher education long time ago-but all of them introduced & increased fees almost every year (Professor David’s numbers are fairly accurate). Furthermore, some of us leave the country anyways after getting a free degree and at least they would have given a part of the cost back to Sri Lanka, if they had paid some tuition. One commenter asked what Professor David has done to Sri Lanka. He served as a lecturer in Peradeniya for many years-I was his past student. Some of us have volunteered to serve the country in any way we can-but never even got a reply (negative or positive). I helped both Peradeniya & Moratuwa start new Masters programmes through personal contacts I had at both campuses-and visited & helped them almost every year for the last 30 years or so. Will continue to help as long as I can. JS

    • 0
      0

      JS – why do you say only the undergraduate should pay for tuition? If the state has no funds to educate its children, then a small fee needs to collected from ALL children in the primary and secondary schools as well as the undergrads. we should limit the number of undergrads – only the required numbers should be admitted to state universities. In the U.K, the fee was ~£2000 per annum when it was introduced, but now it’s £10,000 per annum. Further, now they want to include the pension shortfall of the academics into the students’ tuition fees – absolute nonsense!!

    • 1
      0

      JS, can I add my thoughts.The education system is corrupt. It is said that not every student who enter the university sat the entrance exam.Proxies are also a factor to be logged in. What about those that study at Colombo and sit the exam from an under developed area.How many proxies sat for the medicos who are parading the roads?

      The solution is to bioregister all that enter the UE classes as they do at the visa office. Provide the University education free but get all the graduates to pay for their education from KG to the University from their wages.All courses to be conducted in English.
      There should be a strict audit of the Profs and lecturers.Recently there was a report that of 200 students who failed to attend lectures ( attendance less than 10% of the lectures conducted) 120 were allowed to sit the exam.The lecturers, the Profs the Deans and the VC should have been dismissed form having allowed this.

  • 2
    0

    My opinion:
    1. How many doctors do we need to serve the SL population as per the WHO guidelines? The same number of doctors need to be trained in the state medical schools free of charge.
    2. Doctors who are trained in the state medical school must serve the state for at least 5 yrs
    3. Sri Lanka is a free country and there are private engineering, nursing, physiotherapy schools, then why not a private medical school?
    4. What the GMOA is complaining is that the required quality is not provided by the SAITM [on the other hand, patients are dying unnecessarily in the private hospitals, but the GMOA doesn’t want to talk about this!!!]
    5. There should be a presidential commission that should look into private medical education and make recommendations as to how it should be governed
    6. Sri Lanka has a huge potential to establish private medical schools that can train local students and a huge number of overseas students providing huge employment opportunities and earning and contributing multi million dollars to the national economy.
    7. Primary, secondary and all undergraduate education must be free of charge. If the state has no money to educate the required number of undergraduates then it should charge all students -primary, secondary and undergraduate. Those children below the poverty line ought to be sponsored by the state.

  • 0
    0

    When the question comes if it has to be FP firms or NFP firms, the smaller size FP firms are service oriented, efficient, low coast. They express a fear or respect towards clients. This is not visible in even at smaller size NFP firms. They mimic government departments in efficiency and service orientation. I have my own experience in both. I am aware of their organizational culture.

    In education, almost all universities have to be categorized as above medium size, but the colleges’ status are questionable. So, running these institutions and maintaining the Harvard and Yale names is not really about academic excellence. It is a pure business management. That is why the Presidents or VCs ended up being highly paid. Universities become unscrupulous business places, instead of sanctimonious, educational altars.

    Then the question is it worth to continue with NFPs? The tentative answer will be “yes”. KD had pointed that US government is losing $30 billion in tax income. That is only one side. But these business type guys’ ability to roll money from multiple sources is unparalleled. That is the reason they have to there. Just to mention only Bill Gates, we know how much he annually donating. If this money has to be channeled through a proper path and utilized for public purpose, the highly paid business managers need becomes unavoidable. If these NFP firms are not using their highly seductive marketing techniques, or if they are not attracting the philanthropists’ funds, it has be the burden to State. Then the State’s inefficiency, tax burden, slacking private businesses… it became a chain reaction and the country’s GDP will be affected. Here no quality is considered, only the effect of funding is being considered.

    What the viable solution is not accepting NFPs as angel and keep them regulating is the way to go.

  • 1
    0

    Sri Lanka should look at this as an investment. It is up to the investor to ensure that SL benefits from the investment. We export $5 billion worth of young STEM grads to the west absolutely free of charge every year. This $5 billion is what I got when I included cost of bringing up a child for 25 years, education cost during that 25 years, probability of a student entering the kindergarten becoming a STEM grad in USA and adjust for inflation and multiply by no of grads leaving. I presented a note to a Senior Deputy Governor at Central Bank with all these details and suggested that we ask USA to write off the balance debt which was far less than this value. And these grads don’t send us any money unlike unskilled workers going to the middle east. In 2016, professionals leaving SL increased by 5% and workers going to Middle East decreased by 8%. When this was mentioned at a session at Central Bank and I mentioned about this disparity of remittances and the export value of STEM grads the Governor said that we should try to get them back. Although I did not say anything what came to my mind is the fact that they come back only when they have grey hair which may not have gone well with the Governor. Is it not a pity that we don’t get a red cent for the most valuable of our exports – $5 billion per annum and we don’t make use of the most valuable in put we receive absolutely free of charge – SL Rs 1186 trillion worth of solar energy per year. What the Govt should do is not to charge for the education which is the easy way out, but ensure that we make use of these grads to develop the country to a level which will retain them here. If somebody says that it will never happen that only indicates their mind set. A chemistry professor of my son wanted my son to tell a batchmate of his that even the beggar on the street has contributed their education.

  • 0
    1

    Kumar David has given us much to think about. Without ruling out fees I think access to quality education for the poor is important. Coming to the reality here, university teachers are relatively well paid and the problem is less to do with funding by the state than the manner in which staff are hired and how quality teachers are kept out for narrow and petty reasons. What we have under the UGC is a kind of mafia setup wasting our resources and depleting quality and is virtually impossible to challenge as it has become politically entrenched. This depletion of quality becomes infectious, affecting our schools, professions and public life.

    • 1
      0

      Thank you Prof. Kumar David for a perceptive article backed up by hard numbers. Indeed, if I recall rightly, the Obamas paid off the final instalment of their loans only when Obama was President. He did a lot to ease the burden on students like a period after which the balance of the loan is set off under certain conditions

      There is, however, a small correction I would like to make to what you say about the cost of education. There are means for people without money to go to the elite private schools where total cost is upward of $60,000 per annum.

      In the US there are state universities and private universities. State universities are about 50%+ cheaper for instate students. Private universities are uniformly expensive for everyone. State universities like University of Michigan can be almost as expensive as the private ones for out of state students, whether American or not. They have a scholarships but they are smaller and fewer.

      Private universities are more expensive except those “need blind,” often the best private universities. They evaluate admission independently of a student’s financial situation, then they evaluate how much the student can pay and the balance is scholarship. Why? If the student does not come because of cost, the next on the waiting list would be scholastically less qualified. Many eligible children, even of professors, do not apply thinking them too expensive.

      My son was admitted to both Michigan and Rice, an elite university in Texas. As an instate student Michigan’s cost was $30,000/year for 4 years. At Rice billing $60,000, his cost was $20,000 and the rest was scholarship. Now I am on leave on $500/month. Rice has offered him a full tuition scholarship. Education was costly only when I was earning there. Some get a full ride.

      Lesson to parents: research the system. Do not assume that cost is the cost on the brochures.

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