During a recent research for my blog post on the "Rising Cost of Education" in the United States, I realized that Higher Education Institutions (HEIs) are caught between declining revenues due to several factors (i.e. growth in the value attached to college education by the labor market, long-lasting impact of the recession years, and reduction in state government subsidies, etc.). It was also realized that government sources account for the largest proportion of revenue for HEIs.
Given my experience in higher education, the realized government-HEIs financial relationship is unsurprising. Like the US, Liberia's public higher education finance is greatly reliant on the State (government) support which comes through subsidy to institutions. Government subsidy is propped by tuition and fees (including scholarship funds) generated by the institutions. Due to the lack of national funding research institutions and formidable industry-academia partnerships in Liberia, government subsidy and tuition and fees account for the largest and/or the only sources of revenue. Other revenue sources are scanty and nominal. Over the years, post-war reform in higher education has led to massive expansion in the number of HEIs.
Whereas pre-war Liberia comprised of three HEIs including the University of Liberia (UL), Cuttington University College (CUC), and William V.S. Tubman College of Technology (TC), there are currently over 30 HEIs operating in Liberia. Expansion in the number of institutions has created access for underserved regions and persons. However, it has come with accompanying challenges accounting for one of the primary problems facing Liberia's higher education system. Several institutions are connected to the mainstream funding (government subsidy), overwhelming the government's capacity. Hence, a continuous budgetary shortfall in government subsidy to HEIs; subsidies are modicum, delayed, and in some instances unavailable.
Liberia's higher education continues to experience persisting challenges since the post-war reform process. These challenges include finance/budget, quality versus access, inadequate and unqualified professors, logistics, and leadership deficit, etc. Finance and budget constraints represent a prime challenge face by HEIs.
Shortfalls in higher education finance have been observed in many forms and can be traced to the regime of President Ellen Johnson-Sirleaf. President George Weah's government added "fuel to fire" and exacerbated the problem when he (President Weah) declared "free tuition" at all public HEIs. This was an ill-advised political decision based on inadequate and/or no consultation with higher education stakeholders. Consequently the ability of HEIs to adequately fulfill their core mission has become hindered.
Demonstrations and unrest by students and faculty have become an emergent norm. UL, Tubman University (TU), Bong County Community College, and Grand Bassa County Community College are a few examples of institutions that have experienced demonstrations of late. For a departure from this paradigm and to amply fulfill the purpose of higher education, there is an overarching need for a deep-dive into the holistic higher education anatomy beginning with the National Commission on Higher Education. This is essential for Liberia's development. Substantial body of literature documents high economic returns to investments in higher education- interlocking the development, growth, and innovation of a nation. Higher Education is heavily responsible, for better or worse, for how well societies make material provision for their citizens.
The Government of Liberia must therefore assume the responsibility to adequately fund HEIs. The current funding approach characterized by inadequate subsidy and lack of complementing funding sources such as tuition will continue to derive shortfalls in institutional finance and budget.
Shortfall in the provision of subsidy to HEIs is perilous for the effective functioning of institutions. HEIs normally derive administrative and operational costs through their budgets. Without adequate funding to support institutional cost of production (administrative and operational initiatives), how do institutions thrive?
HEIs depend on their budgets to function and provide quality education. The budget is one means, and arguably one of the most important means, through which an institution enacts its mission, vision, and strategic priorities. Shortfall trends in Liberia's higher education finance have been observed in many forms. In most instances, subsidies do not realistically measure up to the needs of institutions. For example, to initiate the rebuilding and transformation of TC to TU, the government provided $1.5 million out of 8 million budget request in 2009.
To enhance a transformation that required renovation of dilapidated buildings, construction of new buildings (academic, administrative, and residential), hiring of staff and faculty, etc. to support four new colleges in addition to the original College of Technology, how impactful could 1.5 million be? Similarly in 2015, $15 million in appropriation was received by UL out of $28 million budget request. Both institutions still lag behind their earlier budget needs. The current draft budget for forthcoming Fiscal Year (2019/2020), apportions $3.9 million to TU which is a sharp decrease from $6.1 million in 2015. UL on the other has been apportioned $16 million.
A second form of shortfall is inherent in Liberia's budgetary framework (cash-based). HEIs as well as other government agencies experience huge gaps between their budget (appropriation), allotment, and actual disbursements (payments) meaning what is normally appropriated (budget value) is never disbursed in full to institutions. For a practical explanation of the budgetary framework, consider that an institution received a budgetary appropriation of $1 million from the beginning of the budget cycle but was disbursed a total of $700 thousand over the period of the entire budget cycle. The obvious variance of $300 thousand definitely accounts for a deficit (shortfall) in the institution's budget, affecting components of institutional programs and activities aligned to said amount.
The instances of shortfalls in this paper establish that in addition modicum apportioned subsidies, HEIs are shortchanged during disbursements. This brings into play the contribution of tuition and fees as a significant component of higher education finance and budget.
Tuition and fees provide the means through which HEIs mitigate budget deficits. This mitigation model is critical for Liberia given that HEIs major revenue sources revolve around government subsidy and tuition and fees. With such exponential shortfall in government subsidy to HEIs, tuition and fees is ostensibly the major means to mitigate the gaps. Abolition of the collection of tuition has only intensified the already existing financial constraints.
The pursuit of a tuition free policy needs to consider institutional cost of production. In the absence of collection of tuition, the purpose serve by tuition will lag and produce funding gaps. Therefore, the need to identify other source (s) of funding to compensate for tuition loss to institution is preeminent and ought to be considered in the package of free tuition. The onus is on the government to mitigate the intentional shortfall that has been created by the tuition policy. The most appropriate mechanism would be for the government to provide additional funding to the institutions to compensate for the loss in revenue.
The latter may be impractical given national economic woes and the already existing impediments of inadequate government subsidy. This is a dilemma! There has to be a way out to ensure institutional effectiveness as HEIs are perceived as societal assets of immense value. The examples of UL and TU coupled with trending demonstrations provide the need for the government to revisit her approach to higher education finance so as to mitigate lingering budgetary constraints.
The most available options for the government to remedy these constraints include: increase in existing subsidy to institutions; reintroduction of the collection of tuition at public HEIs; and/or assuming the dollar value of tuition loss at each institution and providing same in addition to existing subsidy; and prioritize higher education in concessions and international engagements to create avenues for auxiliary funding.
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