HE funding models: Croatia and Austria

1. HE funding models: Croatia and Austria Danijela Dolenec Faculty of Political Science of the University of Zagreb

2. Structure of the presentation • Introduction: about TEMPUS ACCESS project • Research study on HE funding models: Austria and Croatia • Current legislative innovations in Croatia’s HE funding • Reflections

3. Tempus Access project

4. EU Tempus Structural Measuresproject • “Towards Equitable and Transparent Access to Higher Education in Croatia“: ACCESS • Project priority area: Governance reform (Equal and transparent access to higher education) • Project duration: 3 years (January 2010-January 2013)

5. Partners • IDE as project coordinator • MSES • 6 public universities in Croatia • Council of Universities of Applied Sciences and University Colleges • ISR - CERD • Institute for public finance • Corvinus University of Budapest (HU) • Dresden University of Technology (DE) • Mälardalen University (SWE) • University of Graz (AU) • International School for Social and Business Studies (SLO) • Ministry of HST (SLO) • Individual Expert Jon File (CHEPS)

6. Objectives of the project OVERALL: Contribute to ensuring equitable and transparent access to HE in Croatia by removing financial obstacles, improving data availability and building capacity for action. Specific objectives: • Collect data on social status of students in Croatia to evaluate the effectiveness and of HE funding and student support policies and assess the capacity to enhance them. • Establish a policy framework to enhance the equity-dimension and transparency of the HE funding and student support system in Croatia, which can be translated into amendments of laws and regulations. • Establish staff positions at university level and national coordination group to implement and monitor measures for equitable and transparent access to HE.

7. Main expected result A concrete proposal of the new HE funding and student support system in Croatia … which will be based on the principles of evidence-based policy making. … which can be translated into concrete amendments of laws and regulations … which can be implemented by trained staff and monitored by a National Coordination Group

8. Research component of the Access project • Eurostudent • implemented in 2010. for the first time in Croatia • analysis and results in 2011. • HE funding models study: 2010. • Models of student support study: 2011/12. • both studies done in comparative framework: Croatia in a European context (Austria, Hungary, Germany, Slovenia and Sweden)

9. HE funding models study

10. Research study on HE funding models: Austria and Croatia

11. Focus on Croatia and Austria • State funding allocation and tuition fees structure; not student support as the third pillar of HE funding models • Austrian model of HE funding has been used as role model for recent reform proposals in Croatia • In Croatia no systematic ‘model’ • Instead, unregulated change in last decade • Currently a comprehensive legislative reform under review

12. Austria: overview of HE system • 22 universities • 20 universities of applied sciences and 17 teacher training colleges • private universities exist since 1999; in 2009 11 private universities were accredited • student numbers: • In line with overall trend of HE massification which puts a strain on public funding

13. Austria student body • 87% of the student body at public HEIs • officially all students are full-time students , with exceptions related to employment or family commitments (also in Germany) • the largest number of students study law, business and social sciences • same in Croatia, Germany, Hungary, Slovenia and Sweden • number of foreign students as a percentage of all tertiary enrolment is 16.7% • Germany 11.3%, Sweden 10.3%, Hungary 3.5%, Slovenia 1.3% (OECD 2009), Croatia 2.6%

14. Tablica 1: Ulaganja u visoko obrazovanje u Austriji, ukupno, u sveučilišta, i kao udio u BDP-u, za razdoblje 2004.g. do 2007.g. Izvor: Universitaetsbericht 2008. Higher Education Funding in Austria 2004 - 2007

15. HE Funding in Austria per student

16. Austrian state funding model_1 • since 2004. Act on Universities, universities receive their general funds as a three year lump sum which is managed by each university autonomously. • first such three-year contracts were signed for the period 2007-2009 • the idea of lump-sum financing is that universities are awarded a grant amount which they can freely allocate internally, in the interest of achieving maximum efficiency (Dolenec 2009). • The lump sum is distributed on the basis of performance agreements which are contracts between the Federal Government and universities.

17. Austrian state funding model_2 • Within these performance agreements universities have to describe their strategic goals and aims for a period of three years (Kottmann 2008: 33-34). • Plus, there is an ‘intellectual capital’ report which universities have to hand in to the ministry every year • this report informs about the university’s activities and goals, the intellectual capital gained and about (temporary) outcomes of the processes agreed upon in the performance agreement. • 20% of the funding is based on performance indicators, 80% of the funding is contracted between the university and the ministry (Kottmann 2008: 34).

18. Austrian performance indicators

19. Tuition fees in Austria • Tuition-fee system introduced in Austria in 2001, then revoked in 2009. • After 2009. reform - home and EU students who study within proscribed length of a study programme pay no tuition • Regular length of study = length of study programme plus 2 semesters • Those who study longer, pay 363,36 EUR tuition fee per semester • The maximum amount of tuition is determined by the federal ministry of education, and tuition fees are the same for all universities and academic fields

20. Austria tuition fees in comparative perspective

21. Croatia overview of the system • Public: 7 universities , 11 universities of applied sciences , 4 university colleges • Private: 1 university, 4 UAS, 22 UC • Student numbers: • During a longer period 1990/91 to 2007/08 the number of students in Croatia grew 95%, from 70.781 na 138.126 (Matković, 2009.).

22. Croatia HE funding levels in European perspective • Public expenditure on higher education, Eurostat 2007

23. Croatian state funding model • budget allocations from the state are based on input criteria, such as number of state-subsidised full-time students, number of employees and other material expenses. • the main obstacle to efficient financial management at university level is the fact that constituent units of large universities have separate legal standing (Hunjak 2008). • lump-sum budgeting was legislated in 2003 with the Act on science and higher education, and some steps towards implementation were made in 2006. • the intention was to leave behind a budgeting system that is historical and incremental (Hunjak 2008) but not much progress has been made

24. Until very recently, Croatia had a dual categorization of students based on fee paying status: those within and outside state subsidized quota • increase of student numbers over the years meant an increase in numbers of fee-paying students in Croatia • during academic year 1993/94, 11,8% students were paying tuition fees, while in 2004/05 56,7% did • since then the proportion is stagnating around 54% • Between 1994 and 2008 tuition fees for full-time undergraduate students grew 40% (Matković,2009.) • Now range between 750 and 1350 EUR for full-time undergrad studies • In 2006 OECD characterized this system as ‘complex, does not appear to be equitable, in the sense of directing support to those students with the greatest needs, and does not encourage efficiency’ (p. 33). Tuition fees in Croatia_1

25. Tuition fees in Croatia_2 • HEIs developing a linear model of tuition fees, whereby fee-paying status is linked to success at studies • according to this model students are ranked and charged a fee based on a linear model, where they pay some amount between 0 HRK and the maximum fee depending on their success at studies (accumulated ECTS credits). • UNIZG introduced this model during the 2007/08, and the model has been spreading to other institutions since (Split and Rijeka introduced it in 2010/11) • In addition to the introduction of this unique model of tuition fees, there has been confusion regarding status of tuition fees for second degree studies, and students who enrolled undergraduate studies in 2010/2011 initially were charged no tuition fees (unlike previous generations)

26. Current legislative innovations in Croatia’s HE system: focus on funding issues

27. Key elements of reform • Entire HE system in Croatia used to be regulated with one legal instrument: Act on Science and HE • Proposed legislative reform introduces three legal acts: • On higher education • On science • On universities

28. Key changes in proposed AHE (MSES web) • The introduction of regulated enrolment fees instead of tuition fees • The maximum amount of tuition fees is limited by law to 60% of the average monthly salary in Croatia • Within this maximum amount, universities decide on the amount to charge • Students will have the right to offset the cost of enrolment fees based on by-law regulations (criteria not yet known)

29. Key changes in proposed AU (MSES web) • Restructuring the university • Undertaken based on decisions made by universities themselves which define their future structure, within regulations set by the law • Internal organization • University statutes regulate this with the aim of greater flexibility and better governance • Rules for electing the Rector • Changes to how the Rector is elected, as well as mandates and structure of other bodies within the university • Legal review • Introduction of legal review via university council, which sits representatives of the founder (Croatian government) • Programmatic financing • Introduction of 3-year programme agreements

30. Programmatic financing: introduction of performance agreements • inspired by Austrian experience, and also Denmark, Finland etc. • performance agreement is negotiated between the university and Croatian government, with universities determining strategic goals and the government undertaking financial commitments necessary to implement them • lump sum budget is determined for a three-year period • implementation is monitored via indicators set by the Croatian Government

31. Reflections

32. Key differences between Austria and Croatia • Higher financial commitment of the government • A regulatory framework aiming to enable equitable access • Components of the Austrian system reflect a comprehensive model • In the case of Croatia, components do not make a model: many unregulated areas and sometimes unwanted consequences

33. Key trends in HE • Commercialization • Massification?

34. Commercialization of HE • European HE systems are predominantly public • But, all over Europe there have been pressures to introduce tuition fees and other private sources of funding HE • To offset increasing public expenditure on HE • But also because of a changed conception of the role of HE: individual and social costs and benefits flowing from it • More recently there has also been resistance to these reforms • Student protests • Criticism from within the academic community • It is reasonable to assume that commercialisation will have adverse affects on equitable access to HE

35. New European trend: after massification – decline • HE massification has been the main European trend in last 20 years • However, in considering future funding arrangements, it is important to note that projections suggest that a decline in student numbers is expected across the countries in our study (including Croatia) as a result of demographic trends (declining birth rates). • According to a Eurostat (2009) report, long-term demographic projections show a fall of around 11 % among those aged 5-9 in the EU-27 by 2020 (p.13).

36. Thank you Danijela Dolenec Faculty of Political Science, University of Zagreb ddolenec@fpzg.hr