The new higher-ed reality

A few days ago, pharmacy students at Bacha Khan University Charsadda (BKUC) in Khyber Pakhtunkhwa protested that, even after years, their programme has not been registered and accredited by the relevant professional and accreditation body, the Pharmacy Council of Pakistan (PCP). The reasons they gave were the university’s inability to hire the faculty members needed and acquire other accreditation prerequisites.

For the last eight years, the Higher Education Commission’s (HEC) budget has been virtually stagnant in absolute terms, going from Rs62 billion in 2017-18 to just Rs65 billion in 2024-25. While that could be acceptable in the early part of that period, no sector of society has been able to escape the effects of record inflation over the last few years.

From 2022-23 to 2023-24, total HEC grants to institutes/projects went from Rs56.5 billion to Rs55.8 billion. Even when adding in all other government / provincial grants, the total figure went from Rs96.4 billion to Rs99.7 billion. Obviously, this slight increase was insufficient to compensate for the effects of inflation. As a percentage, public grants covered approximately 40 per cent of the expenses of public universities in 2022-23. This year, in 2023-24, that number saw a reduction to 38 per cent. With most universities having no other sources of income, almost all had to resort to raising tuition fees. Over the same two years, total tuition fees collected went from Rs119 billion to Rs134 billion, an increase of 12.6 per cent.

It has taken eight successive budgets, but universities should finally be certain about which way the wind is blowing on public support – stagnant in absolute terms, which means less than ever in terms of purchasing power and likely shrinking every year going forward. In the last few years, a new term has entered the public discourse and thinking on local higher-education funding: endowment funds. Endowment funds comprise financial assets of an institution, such as universities, that are invested in generating income to support activities and operations. What differentiates it from other pots of money a university has is that they may add to but do not touch the principal amount, only the income generated from it.

Put simply, an endowment fund is a university’s nest egg and, to ensure it is not squandered away, is professionally managed. The fact that contributions going towards an endowment fund’s principal cannot be touched and will continue to do good (generate income) into perpetuity makes them more attractive to donors compared to one-off unrestricted-gift contributions that come with no strings attached that universities could spend as they please.

Building an endowment fund from scratch is a long game, too long perhaps (up until now) for vice-chancellors (VCs) appointed for short tenures to take an interest in. However, the situation of many public universities is dire, and their management is turning desperate and grasping at straws to consider endowments as an option.

With few exceptions, understanding how to set up, fund, and run an endowment fund is still minimal. Endowment funds are developed by running a surplus, courting alumni, and schmoozing with donors. But running a surplus is an alien concept for public universities, taking steps to maintain a relationship with alumni, erstwhile students sometimes treated with disdain, may be seen as desperate, and talking up donors for money is seen as undignified and ‘unscholarly’ (whatever that means) and they may have a point.

That is why in many countries where the higher education funding landscape for universities is precarious, the people leading universities are not scholars but people who can do those ‘unscholarly’ but necessary things, know donors, can convince them to write a cheque, and can pull the right levers of power in government, politics, and industry for the betterment of their institution.

Instead of doing any of that, many would rather continue business as usual - bow and roll around on the floor in some office of the bureaucracy for a slightly larger handout. As for starting endowment funds, I have heard some express their expectation that this will happen by simply being handed a big pot of money from above (the federal or provincial government), with no effort needed.

Universities are the new colleges of domestic political ‘halwa’-barrel spending – every elected representative in the National and provincial assemblies is eager to boast about bringing one (more) to their district. However, establishing a functioning public university takes more than five years of PC-1 funding from the federal government. It demands continuous commitment and budgetary support for the life of the institution. The reality is that after the inaugural ribbons are cut, plaques are unveiled and the cameras leave, no one is willing to expend effort or political capital to secure the support needed to keep it operating.

If further evidence of the futility of this approach is required, one only needs to direct their attention to recent reports out of KP that over a dozen universities are being denotified or merged with other universities and presumably declared their sub-campuses. A few of those universities were established as recently as 2021. However, when the Governor’s Inspection Team visited these universities in 2023, it concluded that they were neither financially viable nor providing value by delivering educational programmes.

The universities had not been allocated sufficient seed funding and were unable to hire (in some cases) a single permanent faculty member. In some cases, their faculty comprised less than a dozen faculty members employed on a contractual basis, most of whom did not even hold a doctoral degree. The inspection team recommended that these campuses be denotified and merged with another nearby university. Many universities are established on a whim, rather than an unbiased feasibility study.

KP will not be the last province where public universities will suffer denotifications and mergers. The funding landscape for public higher education is more-or-less equally dire for universities across the country: Public support is dwindling, the few universities that possess resources that have the potential for monetisation are, according to them, prevented by the rules and regulations that govern them, and virtually none of them have bothered to think about making institutional investments like endowment funds despite many boasting worldly and well-travelled leadership teams.

I view the news that the government of Punjab will hand thousands of public schools to private partners and begin to wash its hands of delivering a public service as elementary as school education as a surrender and a harbinger of things to come. I cannot recall any other country where a government announced a surrender of such a scale. It also begs the question: what business does a government incapable of delivering school education have in delivering higher education, which is a much more complex challenge? Public support for education, and higher education in particular, is running out.

If universities are relying on donor funding, many donor countries (especially those that our government works with) do not provide higher education as a right. Indeed, in many countries, the cost of obtaining a higher education for the learner is so high that repaying student loans is a lifelong effort, like a home mortgage payment. In such conditions, it becomes difficult to justify supporting subsidised/ free higher education in other countries.

In 2023-24, the collective expenses of public universities added up to Rs293 billion. All public grants combined cover about Rs100 billion of that. Tuition fees brought in another Rs134 billion. All other sources of income, which include income from investments such as endowments, contributed a total of Rs37 billion. With public funding stagnant for years, there are only two other sources – investment income and tuition fees.

With many universities teetering on the edge of insolvency, it is unlikely for investments large enough to generate sufficient income to materialise. That leaves most one place to go to bridge funding gaps.

The writer (she/her) has a PhD in Education.