Study reviews impact of the financial crisis on higher education in Asia Pacific

©UNESCO/S.Chaiyasook

The financial crisis of 2008 had effects throughout the world. The potential damage to higher education is particularly dangerous, as “missed years” can ripple through society.

The Education Research Network in the Asia-Pacific (ERI-Net), established by UNESCO Bangkok, completed a study on the “Impact of the Economic Crisis on Higher Education in Asia and the Pacific” reviewing challenges and approaches to mitigation in Australia, China, Hong Kong, Japan, Korea, Malaysia, New Zealand, the Philippines, Singapore, and Thailand.

Challenges…
Higher education institutes (HEIs) in many countries faced budgetary challenges. Chinese universities encountered reductions in the market value of endowment funds and delays in promised donations. In Malaysia, government funding for the higher education subsector decreased by almost 12 percent in real terms from 2007. Compounding this problem, public HEIs in Malaysia saw an increase of more than 15 percent in student admissions as the job market soured.

In contrast, falling enrolments were a large problem in South Korea. Enrolment in higher education decreased in 2009, for the first time since 1990.  Given the overall economic meltdown, Korean HEIs had to restrict rises in tuition fees, with both public and private universities limiting increases to 0.5 percent in 2009, as opposed to 2008 increases of 8.7 and 6.7 percent, respectively. As Korean HEIs are heavily dependent on tuition income, this decrease had strong budget ramifications.

The crisis also exposed weaknesses in higher education models.  Hong Kong saw threats to its reform objectives to move from the British-based educational system to one more in-line with the region. In the Philippines, private universities encountered fiscal difficulties when international admissions declined and domestic students migrated to less expensive public HEIs.

A similar problem was seen in New Zealand, which had pursued an aggressive expansion of higher education, providing tuition subsidies, allowances, and loans for domestic students. In fact, New Zealand devotes 42 percent of its higher education budget to student support, compared to the OECD average of 19 percent. Surging applications in 2009 resulted in massive over-enrolments of domestic students, while declining numbers of full-fee-paying international students threatened university finances.


Solutions...
Budgetary support to higher education has been the most prominent intervention. China initially devoted only 4 percent of stimulus funds to social undertakings, with a minimal amount given to higher education. However, the government has pledged to match private donations to universities, and plans to increase education expenditures to 4 percent of GDP by 2012.  In response to the crisis, Hong Kong invested more than 2.3 billion USD into an endowment fund, with bids for funds jointly assessed by the Research Grants Council, international scholars, and local business leaders.

Malaysia’s second stimulus package allocated approximately 90 million USD for scholarships, community colleges, and teaching hospitals, and increased allocations to higher education by nearly 50 percent in 2009. The largest intervention came from South Korea, which adopted funding for higher education totaling nearly 4.8 billion USD in 2009. The majority of funds went to subsidies for students from low-income brackets. Additional measures were taken for diversification of universities, integrating ICT into higher education, assisting national universities, and covering pensions for private university faculty.

Several countries also undertook revenue-raising and employment initiatives. Malaysian universities developed consultancy activities, short-term professional development courses, adult education classes, and off-shore programs. It is believed that these measures were essential to progression towards the objectives of the National Higher Education Strategic Plan 2020.

The Chinese government made a concerted effort to enact job-seeking assistance and entrepreneurship programs. The 2009 employment rate of college graduates was 5 percent higher than in 2008, with overall salaries also increasing as employment trends shifted to the higher-paying state-owned sector. South Korea also put programs in which unemployed graduates were recruited as teaching assistants by their institutions.
    
According to Molly Lee, Coordinator of the UNESCO Asia-Pacific Programme of Education for Innovation, the findings have been presented to policymakers, “with the aim to raise awareness of higher education issues and to encourage evidence-based policy-making”.

The full ERI-Net report will be made available online. For an advance copy or further information, please contact email:apeid.bgk@unesco.org

By Seth Leighton, UNESCO Bangkok