Introduction of Cost-sharing Scheme in Ethiopian Higher Institutions: Opportunities and Challenges for Institutions of Higher Education

Abstract

The major problem facing almost all developed and certainly all developing countries is the basic dilemma that arises from continued high social and individual demand for access to various forms of studies and educational services at a time of growing constraints on public budgets. This situation is nowadays a principal source for strained relationship among the state, higher education institutions and the academic community. Higher education has to show that it can compete with other organized interests for financial attention from public funding sources. However, the existing and projected difficulties of public budgets should not be the sole context in which the financing of higher education is discussed. It is also timely to discuss these problems from the point of view of shifting the burden for expansion of higher education form public to private sources. Ultimately, if the university or any other higher education institution is expected to make a significant contribution to change and advancement in society, the state and society in general should perceive higher education less as a burden on the public budget and more as a long-term national investment for enhancing economic competitiveness, cultural development and social cohesion. This is also the framework within which the problem of cost-sharing responsibilities needs to be addressed. Higher education in Ethiopia is characterized currently by a rapid increase in student enrolments and inadequacy of public funds needed to meet adequately the student population growth. On the one hand, the public universities have been dependent on government for their funding. This is because public funding is essential in ensuring access and equity as well as investment in most cost-effective programs. However, with the rapid growth of enrollments of students and declining funding from the government, it has become a matter of urgency to develop alternative approaches to funding. On the other hand, the central reality of most private institutions is that tuition fee payments by students are the financial basis for the institutions, and without them survival would be impossible. Both extremes – depending totally on government budget and only on students’ tuition fees are questionable for the community. Cognizant of this fact, the Ethiopian Government is intending to implement students’ cost-sharing scheme in 2003/2004 academic year. The purpose of this paper is, therefore, to analyze the prospects of private institutions of higher learning with regard to the introduction of cost-sharing schemes. The introduction of students' cost sharing scheme requires pre-planning and adequate preparation, and this paper tries to give suggestions to both the public and private higher institutions concerning the type of preparation they have to make for the years ahead.