Nigerian higher education: the case for alternative funding

Economists use two slightly different concepts to approach education policy: education as a public good and education as a good with positive externalities. All agree that education is a good with positive externalities because it benefits not only the educated person but society as a whole.

This immediately raises an important question for public policy: if one person’s education benefits society as a whole, then who should pay for it? This is where things start to get a little complicated.

For economists, a public good is a good for which the supplier cannot directly charge the consumer and also a good which can be enjoyed by many consumers at the same time.

We all benefit from the security provided by the police and the army, but are not directly charged for it. We all use public roads without paying at the point of use, and my use does not prevent you from using it too. National security and defense, rule of law, parks and roads are public goods and are therefore paid for by the state through taxation or other public revenue.

Is education also a public good in this narrow sense? If not, should it be? What are the underlying questions of educational policy? Most economists and policy makers agree that basic education (primary and secondary education) is a public good, or should be. Not only does it benefit the individual and society as a whole, but it must also be universally available to everyone and free to everyone at the point of use.

A country in which 100% of the citizens can read and write and do some basic math will perform better economically and in all other aspects than a country in which only 50% or less of the population has a basic education. As economist and Nobel laureate Amartya Sen notes in his best-known book, Development as Freedom, being able to read and respond to text messages is a skill that enriches an individual’s life in ways that goes beyond quantification. Thus, Sen argues, such an ability should be available to everyone in society. This is why levels of literacy and numeracy – the most important components of basic education – are themselves indices of human development.

This translates into policy prescriptions that basic education should be universal, even compulsory in some countries, free at the point of use, and therefore publicly funded without the need to charge individuals directly to the point of use. This does not necessarily rule out private financing of education for those who can afford to choose, but it remains the dominant financing model for basic education in almost every country in the world, including Nigeria across universal basic education program, although implementation leaves much to be desired and forces many parents to choose private school instead.

Financing higher education, on the other hand, is not so simple. First, access to university education is not and cannot be universal. Unlike enrollment in a primary school where a child only needs to be of a certain age, admission to university requires meeting certain minimum requirements such as JAMB cutoff marks and five WAEC credits, including understood in English and general mathematics. These requirements automatically exclude millions of young Nigerians, regardless of the number of universities or places available.

Second, in terms of scale, university education does not have the same value for society as basic education. A country in which only 50% of the citizens have a university education would not necessarily be worse off – economically or otherwise – than a country in which 100% of the population is university-educated. In fact, only 15-25% of jobs require college degrees, even in the most advanced economies. For example, only 23% of the 165 million American workers had a bachelor’s degree in 2018, according to a report by the Georgetown University Center on Education and the Workforce. For the world’s population, this figure has fallen to around 7%. In contrast, 90% of the world’s adult population had completed primary education and 87% of children were enrolled in it in 2020, according to 2020 data from Statista and UNICEF.

Moreover, much of the benefits of a university education accrue to the individual in ways that basic education does not in terms of higher opportunity, income, and social prestige. This is why many economists believe that a university education is also associated with negative externalities such as inequality and degree inflation, a situation in which the value of a degree decreases for everyone because so many many people have it. This is precisely the case in Nigeria where underemployment of graduates is high and where obtaining a university degree is often more linked to the social status it confers than to the knowledge and skills acquired or the actual contribution to development. of the society.

In other words, although all education has positive externalities, not all education should be treated as a public good. This distinction is important for public policy. If university education is not universally available to everyone, should the cost of it also be paid 100% by the government by taxing everyone much like basic education? Many economists and education policymakers argue that the cost of a university education should at least be shared by both the government and the individual receiving the education. These are the philosophical and political arguments in favor of university tuition fees. But in the specific case of Nigeria, there is another argument: the massive socio-economic and demographic changes in the country over the past 30 years or so.

In 1992 or earlier, at least 90% of students on any Nigerian university campus had attended a public secondary school where they paid very little or no fees. Today, the situation has almost reversed: approximately 65% ​​of those who enter federal and state universities attend private elementary and secondary schools or “privatized” public schools such as Unity Colleges, staff schools , etc The statistics may not exist, but many neighborhood public primary and secondary schools in Nigeria have not even sent 5% of their students to university in the last 10 years.

By comparison, 50% (or more) of those who attended private primary and secondary schools, as well as so-called unit schools and staff schools were admitted to university during the same period. Nigeria’s real poor simply don’t go to college anymore.

This situation has transformed the question of the funding of university education: while the majority of students at federal and state universities in the country come from middle-income (or higher) households whose parents have paid generously for their primary and secondary education , should the government continue to pay for their university degrees at 100%? Tuition remains free in Nigerian public universities to this day. Students only pay other fees, which in most cases do not exceed N60,000 per year, which is less than the tuition fee per term for the average private primary or secondary school across the country.

It is the greatest social injustice of all time, and it is against the truly poor who are now excluded from both a quality basic education and a great chance of any tertiary education.

How then should public universities in Nigeria be funded now? This last question is important because it is at the heart of all the confrontations between the Academic Union of Universities (ASUU) and the federal and state governments that own, but cannot fully fund public universities. But the answer lies in three alternative financing mechanisms.

First, it is time to introduce tuition fees in the public university system, capped, for example, between 250,000 and 500,000 naira. over the next 10 years. Consider a university with 10,000 students. Tuition fees of N300,000 per year will provide the university with additional funding of N3 billion per year. When this is added to what public universities receive from the Tertiary Education Trust Fund (TETFund), which in some years exceeds 1 billion naira per year – which is less payment of salaries – the typical university would have enough to pay for the expansion of teaching and learning facilities, research and the development of academic staff, which universities badly need.

Second, tuition fees do not have to be paid in advance. They can be borrowed and paid off later in one’s career at government-legislated interest rates and a provision that repayment can only begin if the borrower earns a certain minimum annual salary, say 1.2 million naira. If a student borrows 2 million naira for tuition and living expenses at a fixed interest rate of 20% during a four-year degree program, the student can repay the total of 2, 4 million naira due over a period of 20 years. period, resulting in a total reimbursement of approximately N10,000 per month from a salary of N100,000 per month. Those who do not earn as much would not need to pay for the time being.

Third, universities should diversify their funding sources. Older universities can tap into a sea of ​​funding from their alumni. For example, older universities may start an alumni funding program where each former graduate only has to pay 1,000 naira per month. If properly communicated and used, many alumni of the school will enroll. Thus, a university with 10,000 enrolled in such a program will attract an additional 120 million naira per year, enough to meet the entire library needs of Ahmadu Bello University, to give just one example. Of course, many veterans will be happy to pay more.

Fourth, universities can attract additional funding from many international governmental and non-governmental organizations operating in the country and beyond. Nigeria does not receive much foreign aid, but with the right know-how, the average university should be able to attract $1 million or more from the thousands of sources available across the world. A good number of local non-governmental organizations in Nigeria attract so many every year, why not universities? You really don’t always need a big man or a big government to do everything.

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