SQUEEZE Opinion

Free University Education: What are the Experiences of Other Countries?

Benjamin Vallejo Jr.

By: Benjamin Vallejo Jr. | Squeeze Opinion | Published August 18, 2017 | Updated August 18, 2017

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The word “tuition” comes from the Latin “tuitus” meaning “to watch.” “Tuition” in American English refers to the fee paid, while in Commonwealth English, the word refers to the service of being taught which is paid for by a “tuition fee.”

Tuition fees may be “up-front,” which means that families meet a very large part of the obligation of their children’s education. In the Philippines almost all of this obligation is shouldered by parents, except if their children attend public schools and state colleges and universities, where the state subsidizes a portion of the fees.

Many families have a difficult time to pay up front. This means students or their families take out loans or students apply for scholarships. Some scholarships meet all costs but many are partial in their support.

 

R.A. NO. 10931

Until the enactment of Republic Act (R.A.) No. 10931, or the Universal Access to Quality Tertiary Education Act, on August 5, 2017, Filipino students had no access to free tuition aside from private and state scholarships. R.A. 10931 is unprecedented since it provides free tuition to state and local government-run colleges and universities (hereafter referred to as “public”), state technical-vocational schools, tertiary education subsidies, and a student loan program.

The act also provides an opt out system for students in public universities and colleges who can pay fees. While the law provides these provisions and sets the direction of policies, a law needs an implementing instrument which in the Philippines is known as implementing rules and regulations (IRR). IRR implements policies and may be amended by the executive departments when circumstances warrant it. It is expected that the Commission on Higher Education (CHED), the Department of Budget and Management (DBM), and the boards of regents (BORs) of public universities will implement the IRR. In most cases, we expect that some aspects of the IRR will recognize each school’s peculiarities.

Since this is the first time (aside from the early years of the University of the Philippines (UP); UP began collecting minimal fees after President Benton’s term in 1925) when tuition is free, can we look at other countries’ experiences with free higher education tuition or tuition fee-based education? Germany, England, Scotland, and Ireland, as most of the European Union (EU) countries, had or continue to have free tuition or charge minimal fees. With economic integration and liberalization in the EU since 1970, many EU universities have begun charging tuition fees, although the fees are capped unless the university has autonomous status.

 

TUITION F(R)EE IN EUROPEAN UNIVERSITIES

One concern of education planners in the EU is that fee charging will negatively affect participation in university education. Fortunately, several scientific studies have been done since the 1990s (when EU governments began charging capped fees). The charging of tuition fees resulted in a decrease in enrolment in public universities. A similar study in Canada suggested that for every 1000.00 CD increase in fees, the reduction in participation rates ranges from 2.5 to 5 percent.

As a response to a 2005 constitutional court ruling that prohibits the German Federal government to restrict tuition fees, but rather leaves this decision to the German states, in 2007, seven of the 16 German states began introducing tuition fees for universities. A “natural experiment” – comparing states that charge tuition and states which did not – revealed a negative effect on university enrolments in the states that charged tuition since students looked for opportunities in other states. In the United Kingdom and Ireland, this trend is less, but the removal of tuition caps may result in less enrolments and more student migration. This may have economic implications on the states concerned. The German states which charged tuition eventually rescinded their decisions due to public protests. Lower Saxony was the last state to do so in 2015.

Does the introduction of tuition fees in the EU have negative economic implications? Several scientific studies have been done since the 1990 s which suggests it does but it depends on the country’s economy and strengths. In Germany where the economy has weathered the EU debt crisis, participation rate in university education is a low 27% since the country has a well-renowned system of technical education and the unemployment rate is at 3.9%. This gives students other options for their career choices. The UK has a 48% participation rate and an unemployment rate of 4.5%.

In Spain, where university participation rate is at 35%, is an EU economy affected by the debt crisis with a 17.1% unemployment rate. The government has set a proportional fees cost system depending on the regions. This was deemed necessary to reduce the fiscal deficit. Before the debt crisis, Spain’s public subsidy to higher education consisted almost direct subsidy to students. With a change in the funding model, Spanish education planners’ fear is that Spain is headed towards an Anglo-American university funding model where fees are high and expected to rise, predicated on student loans and with little assurance that jobs will be available.

In the EU, given unfettered mobility between the countries, Spanish university graduates are expected to look for jobs in Germany or the UK, until the latter exits the EU. The UK is an example of a public higher education system in which much of the government subsidy to students is in the form of student loans (around 30%) and less than 5% as direct subsidy. EU countries (with the notable exception of Germany) follow similar models of decreasing state subsidy in varying degrees, thus in the EU, tuition fees average at 890 to 1000 euros a year.

 

FREE HIGHER EDUCATION IN THE PHILIPPINES

The Philippines has no tradition of tuition free higher education, and it is hoped that with free higher education in public universities and colleges, this will translate to economic development and lessen inequity. The Philippines is similar to the United States (US) in terms of people wanting to go to college. Almost half of Americans (47%) would like to go to or have their children attend college, and probably in a culture that puts a premium on higher education, almost all of Filipinos would like their children to have a college or university education and will do everything to do so. The cliché is that the farmer sells all the carabaos to send the panganay and the bunso to college.

Free tuition is relative. The costs will be absorbed by the taxpayer, and in Germany the tax wedge is 49.1 % of income. That is why the premium on free public higher education will be tested in the jobs market. In an ideal situation, the graduate of a public university will easily get a job and defray the costs of his/her subsidy in terms of the taxes paid after employment. A subsidized education will result in a loss if the graduate cannot find employment. If graduates do not find employment, free education will not be sustainable in the long run. The challenge is to expand the economy and create jobs. The first step is to make education more accessible.

 

A CHANGE IN FILIPINO EDUCATIONAL CULTURE

With free state higher education, it is expected that Filipino educational culture will change. Germany which has a free tuition system has less-structured degree programs with larger class sizes and less student services compared to the Anglo-American system. In one sense this cuts on operational expenses for the universities. Will this work with Filipino culture?

The success of RA 10931’s spirit and letter lies in its IRR. There needs to be vigilance and consultations on its application. The public should take note of the student loan program, tertiary education subsidy if their children did not qualify for entry to state universities for it is expected that university places in public universities will become more competitive. There should be guarantees that “full fee-paying” students in public universities (those who opt to pay) will not be treated differently from the subsidized. This has been an issue for Australian universities when full fee-paying places for Australian citizens were introduced in Australian universities. Previously these places were only for foreign students. Also, since the new baseline for entry into the job market is no longer the bachelor degree but the master degree, guarantees should be in place that the burden of generating revenue not be unduly placed on graduate and professional school students, since graduate and professional education has much to contribute to national development in the so called “spillover” of knowledge and expertise that is necessary in raising the ability of people and their employability. In the EU, graduate and professional education has become very expensive even if scholarships are available. In the Philippines, public graduate education deserves similar subsidies as what is given in undergraduate education.

The Latin “tuitus” applies to Filipinos and Germans alike. The public has to watch what the education policy will be since future governments may reinstate tuition fees. Some observers predict Germany might do so in 2020. What about after the Duterte administration?

 

References: 

Dwenger, Nadja, Johanna Storck, and Katharina Wrohlich. “Do tuition fees affect the mobility of university applicants? Evidence from a natural experiment.” Economics of Education Review 31.1 (2012): 155-167.

Hübner, M. (2012). Do tuition fees affect enrollment behavior? Evidence from a ‘natural experiment’in Germany. Economics of Education Review, 31(6), 949-960.

Mora, J. G. (1997). Market trends in Spanish higher education. Higher Education Policy, 10(3-4), 187-198.

Wakeling, P., & Jefferies, K. (2013). The effect of tuition fees on student mobility: the UK and Ireland as a natural experiment. British Educational Research Journal, 39(3), 491-513.

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