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FINANCING HIGHER EDUCATION IN UKRAINE
Krasilnyk O.V.
Taras Shevchenko National University of Kyiv, PhD student, Department of Finance
ABSTRACT
The paper analyzes the financing higher education in Ukraine. The fludy describes the expenditures of consolidated budget of Ukraine for education and higher education, the share of expenditures on higher education in total expenditures on education. The review examines the higher education inflitutions of Ukraine and number of fludents during academic year. The analysis outlines the sources of financing higher education. The results found that higher education inflitutions of Ukraine require optimization of revenues and expenditures and effectively generate and use their financial resources.
Keywords: higher education, financing higher education, higher education inflitutions, sources of financing higher education, financial resources, budget, public funding
Study problem. Higher education is an important element and determining factor of human development and has a special role in generating the intellectual, spiritual and economic potential of nation.
Improving the syflem of higher education - one of the measures which is essential for overcome the crisis processes, increase people's lives, consolidation national interefl, flrengthening the power and preflige of country. Can be argued that without higher education, people cannot give themselves appropriate living conditions, be realized as individuals and protect their rights. Accordingly, the growing interefl of society and flate caused by policy issues in higher education and recognized it one of the national priorities.
Overview of fludies and publications. Significant research performed by foreign and domeflic scientifls about the theory and practice of financing education and science: N. Barr, G. Becker, D. B. Johnflone, T. Schultz, V Bazylevych, T. Boholib, O. Vasylyk, V Heyets, E. Libanova, A. Chukhno and others.
Unsolved parts of the general problem. Due to the works of scientifls about financing education, there is a conflant development of research ideas about the problem of financing public higher education inflitutions (HEI) and the research orientation for socio-economic transformation of science and education. The key issue of contemporary public policy of higher education is to recognize and provide basic and inalienable right of everyone to education. This right enshrined in international legislative acts.
Aim of the fludy. Effective realization of the policy in higher education is impossible without appropriate financing of public universities and other education inflitutions. Sources of financing HEI are budgetary funds, funds of business entities and individuals' funds. The goal is to solve the problems related to budget funding of higher education, search for effective ways of using financial resources and to develop new approaches to financing the sector.
Main results. The wide implementation of science and technical progress has resulted to increasing the number of universities, the number of fludents and the expanding variety of education services. But such reaction to the mass growth of higher education requires more flexible syflem of financing HEI.
The legislation on higher education eflablishes and determines different sources of income of public higher educational inflitutions: budget appropriations, the resources of business entities and government enterprises, and other income. Budget legislation does not prohibit the public higher education inflitutions to combine public funds with its own income that are generated as a result of payment for education and other services provided by education inflitutions in accordance with the law and their main activities.
Let us analyze the practice of financing public expenditures on education, including higher education in recent years.
In the quantities of total expenditures of the consolidated Budget of Ukraine for financing education and higher education during the period from 2010 to 2015 there was a positive trend of increasing in absolute figures, but the share of these
expenditures were approximately at the same level. The growth increased centralization of GDP. This trend allowed claiming of expenditures on education budgets due to an increase extent about changing priorities of the budget policy in the financing of social responsibility of the Sate, and accordingly - and expenditures for education (Table 1).
Table 1
Expenditures of Consolidated budget of Ukraine for education (2010-2015)
Year Expenditures
Total Expenditures of Consolidated budget,mln. UAH Expenditures on education Expenditures on higher education
Total,mln. UAH % of total expenditures of Consolidated budget % of GDP Total,mln. UAH. % of total expenditures o f Consolidated budget % of GDP
2010 377 842,8 79 826,0 21,1 7,4 24 998,4 6,6 2,3
2011 416 853,6 86 253,6 20,7 6,6 26 619,6 6,4 2,0
2012 492 454,7 101 560,9 20,6 7,0 29 335,9 6,0 2,0
2013 505 843,8 105 538,7 20,9 7,3 30 003,1 5,9 2,1
2014 523 004,8 100 105,6 19,1 6,4 28 340,5 5,4 1,8
2015 433 159,8 75 907,0 17,5 5,5 21 059,8 4,9 1,5
Source: Compiled by the author based on [7]
Since 2014 there is a reduction of public funding of education and higher education in absolute and relative indicators. This situation arose due to unfavorable internal and external economic and political conditions: reduction of domeflic consumer and inveflment demand, reducing purchasing power, inflation, reducing lending to the economy and military operations in the eafl.
Expenditures on higher education in our country has always financed mainly by public funds. With the development of the market relations is kept the leading role of such funding, as the basis of higher education are public HEI. But now there is practically no such education organization that is not was engaged in paid education activities. Analysis of the budget financing of education in recent years shows that from 2000 to 2010 there was an increase expenditures on education and higher education respectively (from 4.2% to 7.4% and 1.3% to 2.3% of GDP). But from 2011 to 2015 expenditures on higher education decreased to 1.5% of GDP, i.e. to the level of 2000 and more likely to expect the subsequent decrease in the next years.
Considering the results of the analysis and comparing expenditures on education to GDP ratio in Ukraine (average at
Structure of the expenditures on education
6.7%) from the same indicator in foreign countries may initially get the impression about fairly high level of financing the education sector. For example, expenditures on education as a percentage of GDP are: Denmark - 8.5% -7.3% New Zealand, Finland - 7.2%, Iceland - 7.1%, Sweden - 6.5%, Norway - 6 , 5%, Russia - 6.3%, Brazil - 6.1%, Great Britain - 5.7%, Auflria and France - 5.6%, Israel - 5.5%, USA - 5.3%, Canada Switzerland, Lithuania, Latvia, Eflonia, Poland - 5.1%, Spain and Germany
- 4.8%, South Korea - 4.6%, Chile - 4.5%. Italy - 4.3%, Belarus
- 4.0%, Japan - 3.8% [9].
But despite the amounts of GDP, of government spending, population and GDP per capita should evaluate such indicators rather prudent and cautiously. Because such data do not allow to adequately evaluate the effectiveness of the flate in education, and need it for public funds. Also, ahead of such developed countries, we cannot talk about an appropriate quality of higher education, because not always quantity means quality.
The flructure of the expenditures on higher education in Ukraine for education degrees present in the Table 2.
Table 2
in Ukraine for education degrees (2000-2015)
Degrees Year
2000 2005 2010 2013 2014 2015
mln. UAH % mln. UAH % mln. UAH % mln. UAH % mln. UAH % mln. UAH %
Primary education 789 11,1 2 940 11,0 10 238 12,8 15 662 14,8 15 186 15,2 12 036 15,9
Secondary education 2 564 36,2 11 158 41,6 32 852 41,2 44 233 41,9 42 421 42,4 32 574 42,9
Post-secondary non higher 429 6,1 1 749 6,5 5 106 6,4 6 359 6,0 5 885 5,9 4 141 5,5
Higher education 2 285 32,3 7 934 29,6 24 998 31,3 30 003 28,4 28 340 28,3 21 059 27,7
Source: Compiled by the author based on [7]
The data from Table 2 indicate that during the period for funding higher education from the consolidated budget of Ukraine has allocated 2 285.5 million UAH. (32.3% of total education expenditures) in 2000 to 21 059.8 million UAH. (27.7% of total education expenditures) in 2015. Expenditures
on higher education in 15 years increased, but the share of expenditures on higher education declined over the same period by 4.6%. We can observe that in recent years the share of expenditures on higher education in the total expenditures on education fluctuates in limits 28% (Fig. 1).
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
30,9 28,9 ro CO "-t co" OJ 27,7
■
6 2 5,9 6,0 5,8 5,5
40,8 41,8 41,9 42,3 42,9
13,7 14,4 14,a 14,9 15,9
2011 2012 2013 2014
■ Primary education □ Secondary education
□ Post-secondary non higher ■ Higher education
2015
Fig. 1. The share of expenditures on education degrees in the total expenditures on education (2011-2015), % Source: Compiled by the author based on [7]
So, despite the increase in nominal expenditures of the consolidated budget of Ukraine for higher education, the funds received for funding do not provide this sector need of financial resources. Therefore, the problem is likely occurs does not in the quantitative levels of funding, but in the syflem and mechanisms of rediflribution of these resources. Then deteriorates quality of education services and decreases their availability for the poor.
The effectiveness of solving problems of social and economic development of Ukraine in general, and any region of the country largely depends on the availability and use of intellectual potential of society, much of which is concentrated in the higher education syflem. The experience of developed countries confirms the idea that the higher education levels of the population, the higher level of socio-economic development [6]. That is why developed countries direct financial resources to support and ensure the development of higher education.
We note that the educational level in the country depends on the level of human resources, while the quality of human resources depends on the level of regional development as analysis and patterns of development and financing of higher education inflitutions in the current situation is quite urgent.
In the early 90s of XX century, the birth rate in Ukraine has flarted to fall. Every year there was falling birth rates, its lowefl level seen in 2001, when were born only 376 thousand people. Subsequently, the birth rate began to rise, but the beginning of the economic crisis (2008-2014) and the aggravation of the political crisis, the birth rate again began to decline. Also, there was a transition to a 12-year secondary education, which in turn caused the changes in the number of entrants (Fig. 2).
Therefore, in such circumflances there is a problem significant decrease of entrants, which was overlooked for universities and their leaders that led to failure and unpreparedness for such a situation.
Analysis of the activities and the financing of public higher education inflitutions will identify major trends in higher education, so necessary to review the current flate of public higher education inflitutions III -IV accreditation levels, conduct comparative characteriflics of the individual performance of the public universities.
At the beginning of the 2015/16 academic year, in Ukraine functioned 659 all higher education inflitutions, of which 371 -I-II accreditation level and 288 - III-IV accreditation level.
Fig. 2. The number of births in Ukraine (1990-2015), thousand people Source: Compiled by the author based on [7]
It should be noted that the total number of universities in this trend is inherent as public and municipal inflitutions (8.4%) Ukraine III - IV accreditation from the 2011/12 academic year and private (19.2%), which is shown in Fig. 3. for 2015/2016 academic year decreased by 38 inflitutions, and
2011/12 2012/13 2013/14 2014/15 2015/16
■ overall »public andmunicipal private
Fig. 3. Number of higher education inflitutions of Ukraine III-IV accreditation levels by type of their ownership at the beginning of academic year
Source: Compiled by the author based on [7]
At the beginning of the 2015/16 academic year in Ukraine functioned 288 higher education inflitutions III - IV levels of accreditation, of which 196 - public, 12 - municipal, 80 inflitutions of private property. Mofl municipal and private higher education inflitutions have an average of 1.5-2 thousand fludents. In addition, the part-time fludents in private inflitutions are fludying more than full-time basis. These are moflly small higher education inflitutions and their liquidation or merger
with other inflitutions will not cause a significant impact on the flructure and diflribution of fludents and will affect mainly small their number. There is also a social vision that fewer amount of higher education inflitutions contributes to the growth of higher education quality. However, no of thorough fludies such connection does not confirmed. The characteriflics and data of education activities of higher education inflitutions can provide the number fludents fludying (Table 3).
Table 3
Higher education inflitutions III - IV levels of accreditation and number of fludents (academic year)
2011/12 2012/13 2013/14 2014/15 2015/16
Number of institutions 326 316 309 277 288
Public and municipal 227 220 218 197 208
Private 99 96 91 80 80
Number of students, thousand people 1 899,138 1 770,311 1 673,287 1 437,955 1 375,160
Enrolled, thousand people 307,316 331,164 337,420 291,647 259,904
Released, thousand people 515,032 505,420 471,717 405,392 374,028
The number of students per 10 000 population 439 410 389 335 322
Source: Compiled by the author based on [7]
Despite the absolute decrease of the total number of entrants, the share of those who enter by the flate budget funds increased from 46.2% in the 2011/12 academic year to 51.6% in the 2015/16 academic year, i.e. by 5%. The number of enrollment decreases more quickly than the flate reduces the number of budget places. Therefore, even with a decrease in the number of public places order fludying, the lafl 5 years the overall competition for the budget places for different educational programs does not increase.
Table 4
Enrollment and number of fludents of HEI III - IV levels of accreditation by the sources of financing their education (academic year)
Enrollment Amount
2010/11 2014/15 2015/16 2010/11 2014/15 2015/16
Number of students, including sources of financing their education 381 362 291 647 259 904 2 066 667 1 437 955 1 375 160
State budget 170 616 147 502 134 194 798 571 663 194 649 225
Local budgets 3 360 2 615 2 864 14 486 12 201 14 722
State authorities, legal entities 941 763 765 8 374 10 223 9 520
Individuals 206 445 140 767 122 081 1 245 236 752 337 701 693
Students ratio (%), studying by
State budget 44,8 50,5 51,6 38,6 46,1 47,2
Local budgets 0,9 0,9 1,1 0,7 0,8 1,1
State authorities, legal entities 0,2 0,3 0,3 0,4 0,7 0,7
Individuals 54,1 48,3 47,0 60,3 52,4 51,0
Source: Compiled by the author based on [7]
As a result of increasing the share of budget-entrants, is an (beginning of academic year 2015/2016). This situation occurs appropriate reduced share of fludents enrolled by individuals: because of demographic factors and government policy in the from 58.8% (beginning of academic year 2011/12) to 51.0% allocation of budget places (Fig. 4).
Over the pafl 5 years, there is a fleady tendency to decrease the number of enrolled fludents and those who fludy. May observe that in the 2015/16 academic year, 1.5 times less people entered and fludy than in 2010/2011 academic year. But at the same time, slightly increased the number of fludents fludying from the funds of local budgets and flate authorities, legal entities (Table 4).
Fig. 4. The share of fludents by the sources of financing their education (academic year), % Source: Compiled by the author based on [7]
Conclusions. Should be noted that today the number of higher education inflitutions in the country decreases. In our opinion, this is the result of demographic and economic situation. Based on demographic forecafls, in the near future before higher education inflitutions will appear a problem such as reducing the number of entrants, and it will cause a significant effect on the number of fludents. And while maintaining the current syflem of flate regulation of the budget places number, there is a risk of losing amounts of own financial resources of higher education inflitutions through reduction of contract fludents.
Analysis of flatiflic data indicates the trend to a permanent increase the number of fludents fludying by the flate and local budgets, while decreasing the number of fludents fludying at their own cofl. We consider that it positively characterizes the flate policy in education sphere. The increase in enrollment by public funds positively effect on shaping public opinion about the responsible attitude of the authorities to issues of increase access to higher education and creating conditions for fludying.
Consequently, improving the financing of public higher education inflitutions requires optimization of revenues and expenditures. The growth of higher education inflitutions own revenues limited by number of positions, material-technical base and demand for education services.
However, we note, that the fludy of various aspects of financing public higher education inflitutions requires further development, in particular the research of key indicators that determine the current flate of higher education inflitutions and key trends in their activity.
References
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