Financing tertiary education

I left the dingy Parliament building at 11:30 last Tuesday morning, half an hour after the scheduled start of the meeting. And so did an equally disgruntled former minister of education, Maxine Henry-Wilson, who is now executive director of the Jamaica Tertiary Education Commission.

Ironically, it was a meeting of the Sessional Select Committee of the House of Representatives on Human Resources and Social Development. Our meeting was delayed by the meeting of the Tax Measures Committee carrying on overtime in the single chamber of Gordon House, the only meeting room.

It doesn't matter what the economics committees come up with, I'm convinced that we're never going to make strong and sustained development progress until we take care of other things like our abuse of time, a basic resource, of our decadent family life, and, of course, take care of the productivity of 'human resources'.

Later in the day when Parliament sat, the minister of finance, Dr Peter Phillips, on the one hand, tabled supplementary estimates that shaved $21 billion off the $520 billion 2014-2015 Budget. And on the other hand, the minister of transport, works and housing, Dr Omar Davies, was announcing movement on the Chinese project for the Goat Islands as part of Jamaica's logistics hub mega project. We will need the skills provided by post-secondary education (I have carefully not said tertiary education) to drive these developments. But we have no money. These are the realities that the Human Resources and Social Development Committee, the whole House and its other committees, and the Cabinet must wrestle with unsentimentally and free from the manipulative control of special interests.

And it's also time for a new Parliament building with space for caucus rooms in which meetings can be held simultaneously and for support staff and services in grand and beautiful surroundings.

The committee clerk had the brilliant idea of bringing together everybody who had made a submission in response to the call of the committee for submissions to hear the presentation of one particular submitter, the actuarially bankrupt Students' Loan Bureau (SLB). So three dozen people or so were milling around outside the chamber or crammed into a holding room to wait indefinitely.

It was good to see people like Tony Lewars of PricewaterhouseCoopers, who has led actuarial analyses on the SLB and the current financing of tertiary education and is now chairman of the Bureau, and Dr Kofi Nkrumah-Young of the University of Technology, who is a formally trained expert in education financing. Sensible decisions on financing tertiary education must be evidence based.

Submitting and appearing as a citizen, I was more than a little concerned at what appears to be a massing of special-interest institutions and groups for the meeting. As I said to another citizen-submitter who I could positively identify as such, too often these groups only want to protect their turf and defend their budgets, the larger public interest getting lost in the competition. Spokespersons for the teachers' training colleges, for instance, have recently come out swinging, telling Government and critics to "leave teachers' colleges alone". Well, these mostly tiny professional single-discipline institutions, whose time has passed, cannot be left alone in contemplating the rationalisation and financing of tertiary education.

So here's my submission on 'Funding Tertiary Education in Jamaica' made to the Human Resources and Social Development from last October and which I didn't get to speak to last Tuesday. It has been adjusted somewhat to fit a column for both length and style:

'free' tertiary education not a right

The Charter of Fundamental Rights and Freedoms states: "The right of every child, who is a citizen of Jamaica, to publicly funded tuition in a public educational institution at the pre-primary and primary levels."

This charter provision clearly implies that "publicly funded tuition" in a post-primary public educational institution is neither a "right" of the citizen nor a commitment of the Government.

A number of countries that have offered 'free' tertiary education, in the face of economic challenges, have had to introduce various cost-sharing schemes for tertiary and even secondary education. Jamaica has been forced for years now to return to cost-sharing schemes for both the tertiary and secondary levels of education. The United Kingdom and Barbados have recently increased or introduced cost-sharing at the tertiary level.

The story carried by the UK Guardian newspaper, 'Number of students back to levels before tuition fees raised', Tuesday, September 24, 2013, notes, "The recovery in student numbers for the 2013 academic year suggests that the increase in fees has done little or nothing to dull the appetite for full-time higher education in those leaving school."

After a fall-off in numbers for 2012-2013, the academic year when fees moved from PS3,290 to PS9,000, enrolment rose by nine per cent for academic year 2013-2014 returning to the pre-increase level.

The Barbados government will now underwrite 80 per cent of tuition costs, instead of full value. [With further economic meltdown, further cuts may very well be made in the near future].

Philosophically, tertiary education should be regarded as the responsibility of the individual, with the State providing assistance, as is possible, from public revenue. On February 12, this newspaper carried an Associated Press story, 'Widest earnings gap for college grads in 48 years' in the US. This is an index of the growing value of a college education despite rising tuition costs, the Pew Research Center concluded. And even if Dr Phillips' stagnant economy cannot absorb the graduates, 85 per cent of them have been migrating anyway.

Actuarial assessment

I am proposing (as I have long been doing for a long time) that the Government of Jamaica does the following for creating a rational and rationalised system for financing tertiary education: Undertake a comprehensive actuarial assessment of the real cost of education in all state-owned tertiary institutions. Policy crafted in ignorance is bound to be bad policy.

The Government should underwrite the capital costs of building new institutions and expanding/upgrading old ones to meet projected needs for tertiary education. But, in principle, should transfer 100 per cent of the operational costs of tertiary institutions to actuarially determined real-cost tuition fees and third-stream sources of income.

Absolutely necessary, no further beating around the bush, following actuarial analysis, the capital base of the SLB must be progressively expanded to be able to satisfy within five years the demand for loan financing without special qualification barriers like household income. Two sources of domestic capital inflow into the SLB are: 1) a sliced-off proportion of the annual education budget, 2) repurposing a portion of the HEART Trust Fund for student loans, even if this requires legislative adjustment to the HEART Trust Act.

Government should also explore the possibility of directing portions of special funds like the Tourism Enhancement Fund and the Universal Access Fund into tertiary-education student loans, even if exclusively for studying in the sector which a particular fund supports. The Government should adopt the principle of financing students and programmes by 'scholarships', and not financing institutions. A number of positive results would immediately flow from this approach:

Institutions would be forced to offer programmes that students want and are prepared to pay for, and to deliver quality services to attract students.

Government could easily offer state support for programmes of study based on a priority ranking informed by empirical evidence on the labour needs of the country and the development priorities set by the Government in public policy. Government scholarship support could range from 100 per cent for programmes of the highest priority to 0 per cent for programmes of no priority. Graduates would be obliged to contribute to the Jamaican economy in contractually agreed ways, or opt to have their scholarship converted into a regular student loan.

State financing under this protocol would have the effect of attracting top student talent, especially from among poorer Jamaicans, to high-priority areas, linking state investment in education to the labour market and development needs.

And finally, Government should aggressively promote private-sector schemes of education insurance, including consideration in public policy of a tax break as incentive for participation.

Conceptually simple - and sensible. Politically difficult. And prior to this IMF-supervised structural adjustment programme, we have not generally had governments willing to take tough decisions. With the IMF in town, this is a good time for pushing reforming education financing.

Martin Henry is a university administrator and public-affairs analyst. Email feedback to columns@gleanerjm.com and medhen@gmail.com.