PROVIDING STE WARDSHIP FOR HIGHER EDUCATION
90 percent of operating costs, sometimes nearly the full load.38 There are in most cases no fee caps, allowing fees to be higher— sometimes significantly so—than the public sector’s. There are also some nontuition sources of PHE income. Religious institutions may get funding from sponsoring or ownership organizations, or donated services. East Asian academics, sometimes retired, may offer their services. More important, wealth accumulation in East Asia has led to philanthropy (which shades into entrepreneurial investment), playing a larger role in PHE, as in the Philippines, 39 Singapore (the government matches private donations to higher education),40 Japan (some families have used gains from their lower-education enterprises to donate to education corporations),41 or Malaysia (businesses opened institutions or bought some set up by public university professor–entrepreneurs in the 1980s).42 Funding from abroad is another source of income, and of course arrangements vary greatly. In Vietnam, PHE started with foreign money, with domestic businesses following. Some Indonesian PHEIs maintain ties with
BOX 6.2
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institutions in the Netherlands.43 The Chinese government has been wary of foreign ownership but has encouraged financial contributions, while Malaysia’s twinning setups became substantial quickly.44 Box 6.2 offers examples of resource diversification in China and Malaysia. Direct government subsidies to PHEIs are very rare in East Asia, partly because of the numerical weight of the demand-absorbing subsector, globally the least likely to get such subsidies. Similarly, the recent nature of PHE in many East Asian countries plays a role because, internationally, older PHEIs are more likely to get government funding. Even in Japan, the share of private university income from that source is now only 10.5 percent. Nor does Korea offer a model for public subsidization of PHEIs: they get less than 2 percent of their income from the government.45 Indirect subsidies are more frequent, though not systematic. The three main indirect funding streams are student assistance, justified mostly on access and equity grounds; competitive research awards; and PHE hiring of public university teachers. (Donations
Resource diversification in China and Malaysia
China
Malaysia
• Funding comes from overseas Chinese and domestic businesses, with much initiative by professors and administrators from public universities. • Family-owned and social group undertakings provide funds. • Public universities provide initiatives for affiliated colleges. • Partnerships exist between foreign institutions and Chinese private (or public) institutions. • Recent change allows government loans for students in private institutions. • Donations of land or buildings provide in-kind resources.
• Foreign funding is permitted for PHEIs. • Business firms open their own institutions or buy institutions set up by individual proprietors. • Various sorts of foreign financial and other participation are permitted for both higher education sectors. • Foreign funds are prominent in private semi-elite institutions. • Government pushes higher education to be a regional hub with a large, foreign student body paying tuition. • Students enrolled in accredited programs in PHEIs are entitled to apply for government student loans. Source: Levy 2010.