Higher Education Financing

1. Higher Education Financing The experience of ROMANIA Prof. Ioan ABRUDAN, Vice-president National Council for Higher Education Financing Romania

2. Higher Education Financing: ROMANIA CURRENT MODEL EXPLAINED The universities receive funds from the Ministry of Education as institutional funding for • Core Funding • Supplementary Funding • Institutional Development Funding • Complementary Funding Law of Education no 1/2011

3. Higher Education Financing: ROMANIA Current model (continued): • Core Funding “The Ministry of Education, Research, Youth, and Sports will provide basic (core) funding for public universities through research grants based on the equivalent average cost per student, per study area, per study cycles, and per tuition language.” (Law of Education no 1/2011, article 223 (4) ) Starting with the academic year 2012-2013, the core funding will support a number of grants of studies instead of a number of students. For the current academic year (2011-2012): The funds allocated to the universities are based on the number of the students enrolled. In order to estimate the unitary allocation for a student, equivalency coefficients (related to the educational forms) are used and cost coefficients (related to the study domains) are applied. The core funding represents 68% from the total amount allocated for institutional funding.

4. Higher Education Financing: ROMANIA Current model (continued): • Supplementary Funding “An additional amount of minimum 30% of the amount allocated at the national level to the public universities as basic (core) funding is allocated to universities based on the quality criteria and standards set by the National Council for Higher Education Financing and approved by the Minister of Education, Research, Youth, and Sports” (Law of Education no 1/2011, article 197, letter a) It aims to encourage excellence for educational institutions and programs (Law of Education no 1/2011, article 223, letter c) Components of the Supplementary Funding • a) Supplementary Funding for Excellence • is allocated based on the results of the study programs hierarchy process • encourages the universities to improve the quality of their own study programs The supplementary funding for excellence represents 25% from the total amount allocated for institutional funding.

5. Higher Education Financing: ROMANIA Current model (continued): Components of the Supplementary Funding (continued) • b) Supplementary Funding based on Priority Criteria • Preferential funding for master and PhD study programs developed in science and advanced technologies, for master study in international languages and doctoral studies in cooperation (based on written agreements) with foreign universities • Funding for universities which assumes themselves an active roles at local and regional level • Funding to increase institutional capacity and management efficiency For the current academic year (2011-2012): The supplementary funding on priority criteria represents 2% from the total amount allocated for institutional funding.

6. Higher Education Financing: ROMANIA Current model (continued): • Institutional Development Funding • for the higher education institutions with the highest performance in each of the three university categories (advance research and education, education and research, education) and is allocated based on competition For the current academic year (2011-2012) The institutional development funding represents 5% from the total amount allocated for institutional funding. • Complementary Funding (allocated for other cost categories, which are specific for university activities) • subsidies for accommodation and boarding; • funds allocated based on priorities and specific norms for endowments and other costs of investments; • funds allocated on competitive basis for scientific research.

7. Higher Education Financing: ROMANIA Challenges: • A limited State Budget for higher education at national level (<6% of the GDP) • Budgetary resources distributed to a significant large number of universities (49/56) • Reduced financial adaptability for a number of universities (no backup resources and significant proportion of teaching staff expenditures)

8. Higher Education Financing: ROMANIA Challenges (continued): • Decreasing of the number of potential students (reduced demographic cohorts and Baccalaureate holders) • Limited capacity to attract international students (language and partially infrastructure) • Low income / wages in the Romanian higher education system ↔ limited capacity to attract / maintain highly trained human resources

9. Higher Education Financing: ROMANIA Reform goals: • Increasing the quality of the university core activities (NEL art.2 – “generate a sustainable highly competitive national human resources”) • Consolidating the higher education institutions role by assuming a differentiated mission and by using the resources in order to fulfill the assumed objectives • Reaching the objectives from EU 2020 agenda that concern Romania

10. Higher Education Financing: ROMANIA Reform goals (continued): • Developing the institutional capacity of the universities • Assuming an active role by the universities both at local and regional level • Maintaining the free access to the higher education for the vulnerable groups of people • Increasing the international competitiveness of the Romanian higher education - transforming some of the Romanian universities into providers of knowledge and scientific services

11. Higher Education Financing: ROMANIA Concluding thoughts, questions, comments • A shift from and equalitarian principle of funding allocation to a system based on differentiated funding based on performance; • academic communities are recognizing and feeling it (2011 university classification and study program ranking) • None of the governments in the last decade fulfilled their legal obligations regarding higher education funding • (6%), funding level per student • Each new minister wants a new reform • Even if not so intense as in other sectors, the changes in higher education legislation have not always been in line with a coherent development vision and strategy

12. THANK YOU abrudan@unitbv.ro