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Implementing of Bologna Process Financial instruments and policies
Estonian experience
Heli Aru
Senior Policy Adviser
Estonian Ministry of Education and Research
Main Documents shaping the Higher
Education (HE) Policy in Estonia
Higher Education Strategy 2006-2015 approved
by the Parliament (2006);
Higher Education Internationalization Strategy
for 2015 (2007);
OECD recommendations
- given within the OECD project “Thematic
Review of Tertiary Education” (2007).
Bologna process in Estonia
• Estonia was among the countries signing the
Bologna Declaration in 1999
• Bologna process was seen as a continuation of
the developments, an opportunity to increase
the competitiveness internationally
(comparable degree structure) and broadening
the students´ choices (national and
international mobility)
Implementation of the process
• The so-called “National Bologna Group” was
established in 2000 - representatives: Ministry of
Education, Rectors’ Councils, Accredition Centre,
Student Union and Estonian ENIC/NARIC
• On 2001, the Government approved the reform plan
• Major legislative changes were implemented during
2002 and 2003
• Expert seminars as a working method focusing on
different topics
• Some financial support from the Ministry
The stages of the process
• Pre-Bologna
– Credit-point system based on student workload
– Introduction of the accreditation system
– Ratification of the Lisbon Convention
• After the Ministerial meetings in Bologna and Prague
(1999-2002)
– New degree structure
– Dipploma Supplement
• After the Berlin Ministerial meeting (2003)
– Government Decree on designation of degrees
– Governement Decree on correspondence of qualifications awarded
before and after August 20, 1991
– Quality Agreement of Universities
– State support schemes for mobility
• After the Bergen Ministerial meeting (2005)
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Strategy document for the internationalization of HE
Government Decree on joint programs and diplomas
Regulation of the use of ECTS
Qualification framework and APEL
The Basic Data on Funding
• The total funding for higher education (public combined
with private resources) was 1.37% of GDP in 2005.
• The private sector counts for about 1/3 of overall
educational expenditure in tertiary education.
• Public expenditure on tertiary education was 0.86% GDP
(2007), OECD countries’ mean 1.1% (2002);
• Total expenditure per student (public + private sector)
in 2004 was 29 138 Estonian kroons, which counts for 28%
of GDP per capita. OECD countries’ mean 42.6% (2002);
• State subsidised study places in first cycle are
guaranteed to 50% of gymnasium graduates and 10% VET
school graduates. This is appr 6300 places.
Two funding schemes
• Until 2001 funding was based on students’ intake per
curricula, decided by MoER;
• Since 2002/03 MoER “commissions” from institutions
graduates per study field
– decision regarding the allocation of places per curricula is done
on institutional level.
• There is a Special Advisory Committee where decisions
regarding no of graduates per study field are taken.
- The Committee is composed of the representatives of social
partners and different ministries and chaired by the Minister of
Education and Research.
Major Characteristics that contribute to
the HE Policy
• Large autonomy of public universities
– freely use their budgets with a view to fulfilling their statutory
objectives,
– employ staff and release them from work, determine the wage
level of employees,
– decide upon the total number of students admitted,
– specify the rate of tuition fees for fee-based study places,
– possess assets and buildings,
– contract a loan.
• The Quality Assurance Agreement establishes
requirements for curricula, academic posts and
academic degrees. It is voluntary initiative of 8
universities;
– includes an obligation to assess every year the performance of
the agreement in the previous academic year.
State Commission is concentrated to
the Priority Fields
• Since 2002/03 fields like science and engineering and
health are treated in funging decisions as priorities .
– The number of graduates in science and engineering has
increased steadily – 2005/06 Estonia has reached the level of
11.2 graduates (ISCED 5-6) in mathematics, science and
technology per 1000 of population aged 20-29
– The increase is from the level of 5.7 (1999/00).
• State commission to areas like social science and
humanities is limited. In those fields fee-based students
are strong majority.
Funding of Institutions
State Commission (1)
• Finance from the public budget is provided
primarily in the form of a block grant that
covers the state-commission for graduates
(since 2002/03).
• Both public and private institutions are eligible
to receive funding through the state
commission.
• Separate funding is for capital investment and
for other expenditure which is of a limited
nature.
State Commission (2)
• Funding is allocated to institutions based on the
number of graduates on
– Professional higher education;
– Master, and
– PhD level.
• Institutions are expected to provide 1.5 places in
Bachelor programmes for each place in a Master
programme (stipulated in the Law).
• Final funding per institution is determined by the
multiplication of a base funding rate per study place by
the funding factor applying to the category of student.
• There is no system for the automatic adjustment of
grants to reflect changes in the prices faced by higher
education institutions.
Fee-based enrollment
• Excess demand has been absorbed by allowing
institutions to enrol students outside the ‘Commission’
on a fee-paying basis;
• Cost sharing principle between the public budget and
students
 2005/06 academic year 46% of students studied on state
subsidized study places, the majority of students paid tuition
fees.
• Institutions have the authority to decide the size of the
intake. Public institutions may charge tuition fees to
students who do not gain access to state-commissioned
places;
• Institutions are free to set the level of fees. One of the
few restrictions that applies is the limit to increase
fees by more than 10% between academic years.
Students’ Finance
Grants’ System
• The basic allowance – for covering expenses related to the
acquisition of education;
• The supplementary allowance is a targeted allowance to help a
student with expenses related to housing and transport.
• Allowances are distributed by institutions.
• With the exception of a small proportion (5%) intended to be
distributed on the basis of financial need, they are allocated on
the basis of academic performance. All students (including feepaying students) are eligible for state allowances.
• The budget available for student allowances is tight. In 2006, some
15% of students received the basic allowance and some 17%
received the supplementary allowance.
• Percentage share of student grants in total public expenditure on
teritary education (ISCED 5-6) - 6.4% (2007), 7.8% (expected in
2008 budget). EU-27 average – 10.6% (2003).
Students’ Loan System (1)
• Student loans are provided by private financial
institutions. Loans are available for all students who
are
– studying full-time or
– who are working as teachers and undertaking a teacher training
programme on a part-time basis.
• Students can access a loan for a period equivalent to
the nominal study time for a course and can borrow up
to a maximum amount in a year (the upper limit is
25 000 EEK in 2006/07).
• Repayment commences 12 months after a student has
completed (or otherwise terminated) his or her studies.
Students’ Loan System (2)
• The government guarantees a minimum interest rate to
the lending institutions and also guarantees lending
institutions against default by the student.
• To gain a loan a student must provide security in the
form of two guarantors, a mortgage on property or a
call on other assets.
• The interest rate applying on loans is a commercial rate
determined by legislation but cannot fall below 5%.
However, the rate of interest paid by students is set at
5%. If the interest rate is in excess of this percentage,
the government pays the difference.
• Repayments are suspended in certain circumstances –
e.g. for a parent with children under three years of age
and during compulsory military service.
OECD recommendations
on Students’ Finance
• Reform student support
– consider introduction of an income-contingent student loan
facility;
– over the longer-term, increase the coverage and value of grants
for living costs.
– Introduce principle that all students should pay something for
their studies and receive public subsidies. Arrangements
whereby all students pay approx 50% of the cost of their
studies.
• Estonian response
– Working group for changing Study Allowances and Study Loans
Act (June 2007) =>agreement on establishment on central
agency
Strengths of the current funding model
 Many aspects of current system embody “good practice”
 Autonomy for institutions
 Block grants for operating funds
 Contractual relationship between government and
institutions
 Steering rather than control
 Private institutions operate and receive some public
funding
 Excess demand has been absorbed by allowing
institutions to enroll students outside the state
subsidized education on a fee-paying basis
 Student loans available
OECD Policy Suggestions in the area
of Funding
• Allocate public funding on the basis of actual
enrolments rather than the purchase of a limited
number of places in specific disciplines
- contracts with institutions should focus on broad
objectives
• Simplification of funding allocations
- investment funds in operating grants
- review funding coefficients to reduce number
- increase funding certainty
Support for Bologna related activities
• Programmes supported by the European
Social Fund
– For advancement of internationalization and third cycle
studies;
– For advancement of modernization of curriculum, teaching
methods, career guidance, etc.
– For strengthening the collaboration between HEI’s and business
sector;
• Different approaches, but very often
supporting bottom-up initiatives.
Future developments
... As agreed in the Higher Education Strategy (2006);
• Adoption of three-year performance contracts
– mission and developmental tasks as part of a
contract
– no separate contracts for multiple activities
– more comprehensive scheme for assessment of
performance (base funding, graduate numbers,
serving the community/LLL, developmental
projects)
• level of funding (public and private) per student that
is comparable to the average of OECD countries
(1,3% GDP);
• OECD policy suggestions are under public discussion.
Thank you!