Private Funding for Higher Education: The Turkish Experience

Transcription

1 Private Funding for Higher Education: The Turkish Experience Erhan Erkut, PhD President, Özyeğin University 5th World Bank ECA Education Conference 29 October 2009 Budva, Montenegro

2 Financing of Higher Education Higher Education is expensive Typical major university budgets: $1B Typical per student cost: $10,000/year Who should pay? Social good state Personal benefit student Both state and student

3 Expenditure per Student in Selected Countries, $ (ppp), 2002 OECD (2005) Education at a Glance org/edu/eag2005 1,296 1,346 1,721 1,730 1,851 2,486 2,791 3,235 3,400 3,674 4,731 4,756 4,834 6,047 6,074 6,960 7,023 8,020 8,028 8,205 8,251 8,636 9,276 9,809 10,655 10,999 11,295 11,716 11,768 11,822 12,019 12,416 12,448 13,101 13,739 14,405 15,183 15,715 20,545 23,714 Indonesia Peru Uruguay Philippines Thailand India Paraguay Argentina Turkey Tunisia Greece Slovakia Poland Korea Mexico Portugal Chile Spain Jamaica Hungary Iceland Italy France Ireland OECD AVG. Germany Israel Japan Finland UK Belgium Australia Austria Netherlands Norway Malaysia Denmark Sweden USA Switzerland

4 A richer financing model 4 major sources State Student University Selling of services Contract Research Continuing Education Hospitals Spin-offs and start-ups Donations Alumni Major donors, naming

5 Turkish university history Religious institutions 1331: Iznik Madrasa Military/Imperial institutions 1773: Imperial Naval College Public University 1863: Dar-ül-fünun (the House of Sciences) 1863: Robert College (today s Bogazici Uni)

6 Republic of Turkey ( ) : Istanbul, Istanbul Tech, Ankara Spread across the country Central European system From elitist to massified (28 universities) Penetration 6.1% 1957: Middle Eastern Tech Univ (American)

7 Contemporary Turkish University Number of universities doubled Distance education introduced Student enrolment x 6 21% penetration 1984: First Foundation University (Bilkent) Currently 94 State, 45 Foundation (5% of students) 37% penetration #16 in the world in the number of students

8 Number of Students in Turkish universities 2,914 10,213 25,091 54, , , , , , , , , , , , , , , , , , , , ,765 1,143,083 1,174,299 1,326,986 1,303,188 1,409,627 1,464,740 1,503,981 1,594,642 1,664,364 1,894,109 1,946,442 2,106,351 2,342,

9 State Univ. Financing State: 55% ($3000/student) Services: 40% (hospitals) Tuition: 5% Income from State per Full-Time Student ($) 1,453 1,190 1,509 1,538 2,153 2,059 1,934 1,924 2,002 2,195 2,025 2,288 2,055 2,114 1,433 1,369 1,263 1,270 1,270 1,701 2,287 1,885 2,014 2,658 3,072

10 Number of Students in Turkish Foundation Univ. (about 5% of the total) ,549 50,545 63,979 76,979 90, , ,243 29,360 21,267 13,598 9,852 9,714 9,005 7,954 7,136 6,208 4,633 3,289 1,

11 Private Higher Ed -- most popular in developing countries Number of Students Enrolled in Private Higher Education (Ratio to Total -- Percentage) Argentina, 20 Mexico; 32 USA, 32 Peru, 34 Portugal, 38 Paraguay, 47 Chile, 58 Indonesia, 60 Belgium, 63 Colombia, 64 Philippines, 67 El Salvador, 69 Brazil, 71 India, 75 Japan, 76 South Korea, Perkinson, R The Changing Landscape in Global Higher Education. Paper presented at VTA State Conference, Melbourne. Australia, 22 April.

12 Shares of Private Institutions in National Systems, % of Total Enrollment, 2004 Gürüz, K. (2008) Higher Education and International Student Mobility in the Global Knowledge Economy. Albany, New York, SUNY Press Israel Netherlands Japan Korea Taiwan Chile Brazil Philippines Indonesia India Paraguay Belgium Colombia Iran Lebanon Peru Russia Jordan Portugal Mexico Mozambique Mongolia Malaysia Estonia Poland Venezuela Latvia USA Romania Argentina Switzerland Georgia Uruguay Egypt Thailand France Norway Hungary Bulgaria Spain Ukraine Finland Vietnam Uganda China Sweden New Zealand Ireland Italy Morocco Turkey Hong Kong

13 Turkish Foundation University Based on an Ottoman concept of vakf Philanthropic activity Financed partly by a rich person/group Illegal to make a profit Considerable financial autonomy Small, agile, market-oriented Can set and charge tuition ($6,000 - $18,000)

14 Özyeğin University Founder: Hüsnü Özyeğin Business and Engineering Currently 400 students 40 PhDs 10,000 sqm building Tuition: $16,000 Tuition discounts: 75%

15 Financial accessibility Rich scholarship system 100% tuition scholarship Partial scholarships (75%, 50%, 25%) Credit system First in Turkey Partial tuition Interest subsidized Two years of no payments Seven years to pay back The country needs a tuition-credit system

16 Financing Currently Steady State Budget $20M $100 Founder 90% 10% Tuition 5% 35% Non-tuition 5% 50% State 0% 5% Wild estimates, merely to indicate direction

17 Major challenges Increase tuition revenue Banking on Continuing growth of Turkish economy Large appetite for higher education Increasing penetration rates (to 70%) Attracting international students Generate non-tuition revenue Services (Research, Exec Ed, Certificates) Companies (Start-ups, Spin-offs)

18 University budget calculator Major cost drivers University A University B Cost of faculty $40,000/year $100,000/year Course load 8 courses/year 4 courses/year Class size 100 students 25 students Per studentclass cost Why? $50 $1,000 Teaching College Research University