Several methods have been proposed to raise enough funds for the tertiary education sub-sector in Ghana and a critical look at the system reveals that the cost sharing method is mostly being implemented. Cost sharing from its inception has not gone down well with individuals paying for tertiary education. This article tries to explain cost sharing and its justification. It further identifies some challenges to cost sharing and suggests possible means by which the educational system can moderate these challenges.
The history of funding tertiary education in Ghana
After gaining independence, successive governments have recognized the importance of education as a tool for socio-economic development. Thus governments devoted significant resources to the education sector, providing all facilities, and paying salaries and allowances of teachers, administrators and workers through the Ministry of Education’s annual budget.
This resourcing of tertiary education existed until the 1980s when government launched the Economic Recovery Program (ERP) to stabilize the economy. This led to the eradication of the boarding fees in the 1980s with government asking students to bear part of their tuition and other fees.
Among the various reasons cited to explain the need for a reduction in governments’ funding of tertiary institutions are the distressed economy, the dispute about the beneficiaries of tertiary education and the breakdown of socialism.
With the tertiary institutions facing a funding deficit, even prior to the eradication of boarding fees in the 1980s, stakeholders of tertiary education began to look for alternative sources of funding. Cost recovery and cost efficiency techniques were the key alternatives considered. While cost efficiency techniques were noted to be very important no matter the system being used, cost recovery techniques were implemented. There are two methods employed in cost recovery and these are cost sharing and full cost recovery. Whiles the former is being extensively used the later is just emerging.
Cost sharing in tertiary educational finance and its justifications.
In tertiary education, cost sharing is the system whereby stakeholders of education pay a portion of the cost. Education has several stakeholders and these include government, students and their parents and private sector and; group is expected to provide part of the funds for tertiary education.
In justifying cost sharing, one can clearly testify that the growth in the demand of tertiary education has far outpaced the infrastructure to supply this good. Therefore over reliance on government alone will not only prevent access but also affect quality negatively. It is thus imperative to think that an additional funding source is required and hence the idea of cost sharing.
Also, most countries tend to evolve from a system of socialism to capitalism (individualism). In as much as education is deemed to benefit the state, individuals are consistently realizing positive private benefits of education. Given this realization, the individual must invest in education and thus it is prudent for the individual to pay part of the funds needed for his/her education.
In the classification of a good, a good may either be a private good or a public good. Taking a closer look, one may feel that education lies between the two extremes of a public and a private good (quasi-public good in this case). On this basis, both private and public funds are needed to fund education.
Further, in every system accountability and efficiency are very crucial. As such bringing the private sector into the funding of tertiary education has not only made the system more accountable but also efficient. Financial management practices of school authorities have improved considerable given that there are more parties sharing the cost of providing tertiary education.
One of the problems in Ghana is graduate unemployment. Given private sector participation in the provision of funds to run tertiary institutions (not necessarily providing tertiary education) in Ghana, there is the likelihood that graduates will be more tailored towards industry hence reducing graduate unemployment.
Challenges to cost sharing in tertiary educational finance and the way forward
The first challenge to cost sharing in Ghana is with reference to Article 15 of the 1992 Constitution, which states that ‘higher education shall be made equally accessible to all on the basis of capacity by every appropriate means, and in particular, by the progressive introduction of free education’. On this basis, since tertiary education benefits everyone, the government bears the responsibility to support the sector. This is rather an entrenched position. Ghanaians will admit that the duty of providing finance for tertiary education is far beyond only government. Unless a massive restructuring of the economy is done and such restructuring will entail placing heavy taxes on other commodities and using the tax revenues to fund education.
The other challenge facing cost sharing is the debate about the benefactor of tertiary education. It is generally believed that the state benefits hence the state must fund tertiary education and the state on the other hand realizes that there exists a lot of private benefits in tertiary education so individuals should pay. It must be stressed here that both parties benefit immensely from tertiary education and must therefore pay their due.
Other groups are also of the view that cost sharing is unfair to the current generation given that earlier generations had free tertiary education. Those who hold this opinion must realize that globalization warrants that people pay for what benefits them and so both the state and the individual must pay for tertiary education.
Also, knowing the ordinary Ghanaian to be poor, the question then is how does he/she pay fees if charged? On this ground, many argue that cost sharing only deprives the poor of access to tertiary education. One of the methods commonly employed to help the poor is “Means-Based-Support”. A critical analysis is made of the individual’s ability to pay the fees or otherwise and government augments the individual’s efforts. Another method is the creation of educational banks and other commercial banks with flexible loan schemes designed for needy individuals to obtain educational loans to fund their education.
Cost sharing has emerged as a very potent alternative to purely government funding of tertiary education. Cost sharing is prudent but this method alone cannot solve the funding problem of tertiary education. While the cost is shared, other methods such as alternative income generation (through alumni fund raisings, endowment funds), split fee and grant methods and the scheme for the award of scholarships and bursaries could be looked at. Within the cost sharing framework, facilities for educational loans must be improved. The Means-Based-System of allocating grants becomes very crucial since this takes away the problem of having brilliant but needy students out of the classroom.