Educational subsidy under the Universal Access for Quality Tertiary Education Act (UAQTEA) can be redesigned by transitioning to a voucher system or a socialized tuition fee model to support both students and schools.
This was highlighted in a recent study by the Philippine Institute for Development Studies (PIDS), titled “Financial Sustainability of Higher Education Institutions in the Philippines: Issues, Challenges, and Opportunities”, authored by PIDS Senior Research Fellow Connie Bayudan-Dacuycuy, University of the Philippines Diliman Assistant Professor Herisadel Flores, and De La Salle University Professor Arnel Onesimo Uy.
Currently, the free tuition provided in State Universities and Colleges (SUCs) and Local Universities and Colleges (LUCs) has unintentionally put private Higher Education Institutions (HEIs) at a disadvantage. To resolve this, the study’s authors recommend shifting from a system that funds schools to one that directly provides financial assistance to students.
“While competition improves the quality of educational products and services, some policies embedded in the UAQTEA, like the free tuition fees in SUCs and LUCs, have unintentionally favored public HEIs,” the authors pointed out. They argue that providing financial aid directly to students would empower them to choose the school that best fits their needs, creating a more equitable, accessible, and sustainable higher education system. This approach would also help public and private HEIs complement each other and make better use of public funds.
The study also stresses the importance of ensuring the financial sustainability of higher education institutions, which is vital to the country’s development. Higher education institutions play a key role in the nation's progress and in achieving international goals, so their financial stability is crucial to delivering quality education. The authors recommend that the government implement long-term policies to align HEIs’ development plans with the country’s broader goals, allowing both public and private schools to invest strategically in infrastructure and human resources.
One pressing issue raised in the study is the financial instability of LUCs. “The lack of legal entity and fiscal autonomy for LUCs limits their capacity to engage in long-term development planning and leaves them vulnerable to political partisanship,” the authors stressed. They recommend enacting national legislation to provide LUCs with the financial and operational independence needed to thrive.
The study also proposes consolidating public HEIs into regional university systems (RUS) to address inefficiencies. “If correctly implemented, RUS can improve resource use and enhance the quality of education. It is important to learn from existing RUS models and tailor them to local needs,” the authors explained.
Additionally, the study calls for harmonizing tax policies for both public and private HEIs, which could encourage donations and reduce schools’ dependence on tuition fees. Simplifying tax rules would help schools secure more resources through partnerships and philanthropy. The study also highlights the need for better digital systems to improve tuition collection and overall efficiency, especially for schools in underserved areas.
The authors also recommend HEIs to expand their programs through international partnerships. By working with foreign universities, local institutions can attract more students and offer programs that meet global standards. The study noted that fostering a forward-thinking culture will help institutions stay relevant as education trends evolve, especially with the rise of online learning and micro-credentials.
Finally, the study underscores the importance of fostering partnerships between HEIs to develop pathways that improve accessibility and reduce costs for students. For instance, LUCs could partner with SUCs to allow students to earn credits toward a degree by completing certificate programs.
“Establishing pathway systems relies on the strength and continuity of partnerships and trust between HEI leaders, highlighting the importance of achieving stability in LUCs’ governance and operations, and promoting trust through enhanced transparency and accountability,” the authors concluded.
Read full study at https://bit.ly/pidsdp2024-24. ###
