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Lobby sheet 5: Private contributions to Higher Education Institutions

Argument: Private contributions to Higher Education Institutions should be increased.

For the purpose of this discussion, private contributions are considered to be the business and employers contribution directly to the Higher Education Institution.

Arguments pro:
  • Public funds are limited, so diversification of income should be welcomed;
  • Employers benefit from recruiting graduates, so why should they not make a contribution to higher education?
  • If employers are making a contribution courses will be more aligned towards the employment market, ensuring graduates have the skills and attributes to get a good job on graduation.

Arguments con:
  • There is no value free money - private contributions can come with different obligations, so they can be problematic for academic freedom and integrity, as well as the possible influence on the curriculum;
  • Higher education is a public good and public responsibility, so the state should take care of financing it.
  • Alternative sources of financing could be used as pretext to reduce public funding.

Risk mitigation:
  • Careful analyses of possible consequences and changes it might provoke;
  • Taxing employers so that they make a contribution through public funding methods.

Resources and references:
EUA: Financially sustainable universities II: European universities diversifying income streams(external link)
ESU: Bologna with Student Eyes 2012(external link)

Possible systems and countries to compare:
Countries with universities receiving more than 10% from private sources (according to the report in EUA: Financially sustainable universities II: European universities diversifying income streams): France, the Netherlands, Slovenia, Germany, Ireland

For more information, check the FINST Compendium on Financing of Higher Education – Part 4: Future Funding Scenarios of Higher Education (especially Scenario I and III).