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1 Sustainability of the university in relation to the financing model of higher education in Kazakhstan in the context of the transition period. University sustainability in relation to the financing model of higher education in Kazakhstan in the context of a transition period. The present study aims to examine how the current funding model of higher education in Kazakhstan supports the sustainability of higher education institutions (HEIs) and the strategic development goals for higher education and science, as described in the documents of the national framework for the development of higher education and science. 2010) and the State Program for the Development of Education and Science of the Ministry of Education, Culture and Science, 2016).

The other five higher education institutions represented in this study are public higher education institutions of regional importance.

Table 1. Data sources
Table 1. Data sources

Analytical framework for higher education funding

In addition to triangulating stakeholder perspectives, the data analysis in this study uses a normative framework for the characteristics of higher education financing, which also includes an outcome- or output-oriented higher education financing model. Today, to analyze higher education financing arrangements, this is done in the context of international developments and strategic priorities set by individual states. In this context, the Modernization Agenda for Higher Education in Europe provides an interesting reference framework for analyzing and benchmarking national financing schemes (European Commission, 2011).

Modern financing of higher education is about finding the right balance between financial autonomy, resource diversification and performance orientation.

Figure  1:  Framework  for  analysing  higher  education  funding  arrangements  (Vossensteyn,  J.J.,  2015)
Figure 1: Framework for analysing higher education funding arrangements (Vossensteyn, J.J., 2015)

Funding models for higher education: issues, objectives and options

Options for funding models

When national governments allocate funds to the publicly funded higher education institutions in their system, there are several options for doing so. Discretionary incremental funding in which the government allocates the budget as the previous year with a potential compensation for inflation correction or growth in the system. Of course, depending on the national context and objectives within the system, a combination of the different funding options and indicators within them can be chosen.

Lump sum financing and the (dis)advantages of decentralisation

Increased decision-making speed as a result of a stronger sense of the impact of one's actions. Empowered institutions or units that have real decision-making power can develop greater innovative capacity. Decentralization of responsibility also means that institutions and/or units are more transparent and accountable for their daily operations and results.

How the various interests and objectives are achieved by financing higher education depends to a large extent on the instruments chosen.

Higher education funding in Kazakhstan: state of the art

Kazakhstan’s higher education system: the context

Higher education is regulated at the level of the Constitution of the Republic of Kazakhstan and the Law "On Education" and corresponding official decrees and regulations. The state education standards of higher education (SES) set requirements for all higher education institutions regarding the content of higher education curriculum, the level of teaching of students and the volume of teaching load. In terms of the public-private divide, one can distinguish main 7 types of higher education institutions in Kazakhstan.

The type of higher education institution is determined at the licensing stage and depends on the number of programs and the orientation of research work.

Strategic objectives of higher education in Kazakhstan

The total number of undergraduate students in Kazakhstan is close to 480,000, of which approximately are financed by the state grant system and are almost entirely self-funded students, who pay the full cost of higher education themselves (National Center for Educational Statistics and Evaluation, 2015). The total number of 480,000 students compared to a total population of approximately 17.7 million inhabitants implies that approximately 40% of all young people attend higher education, which is comparable to many developed countries. Making real scientific contributions to the diversification and sustainable development of the economy and the integration of higher education, science and innovation.

Although access to high-quality primary, secondary and vocational education is mentioned as a clear strategic objective for education and the State Program for the Development of Education and Science emphasizes the issue of inclusive learning environments for students with special needs, access to higher education it is not included in strategic agendas (SPESD, 2011, p. 19).

Funding of higher education in Kazakhstan

Students who register for higher education either receive funding through the State's subsidy system - which is part of the State's education system, i.e. the state grant system is the main mechanism for both allocating public funds to universities and ensuring access to higher education for the most talented students and for some categories with special needs. The state grants are mostly awarded on the basis of merit to students who score the best in the overall national test, which is taken at the end of youth education.

As such, around 27% of all students in higher education receive State Grants which cover the costs of their tuition fees (Canning et al., forthcoming). Because students can in principle use the grants to study a specific study program at the university of their choice, these State Grants can be considered a form of higher education vouchers. In total, about 91% of the total public funding for higher education is allocated to universities through the State Grant System.

Another interesting feature of state scholarships is that the tariff varies depending on the type of institution (university) to which students are enrolled. In addition to the state scholarship system, higher education in Kazakhstan is heavily dependent on tuition contributions from students and their families. In universities that enroll students receiving state scholarships, tuition fees for fully self-paying students must not be lower than state scholarships (Development of Strategic Directions for Education Reforms in Kazakhstan 2015-2020 Diagnostic Report, 2014).

As such, private tuition fees are at least on par with government grants. The remaining 8% of the public budget for higher education is distributed among publicly subsidized universities for postgraduate programs, such as master's and PhD programs.

Sustainability of the current funding model

  • Strategic priorities of Kazakhstan’s higher education and universities Based on the various interviews, we formulate the following observations
  • The operation of the State Grant System
  • Resource diversification
  • The level of financial autonomy
  • Performance incentives in the system
  • Student financial support

The quality of education is considered to be basically ensured by state scholarships and accreditations. If we really want to improve the quality of education, many measures are needed to empower institutions to do so, including better involvement of students in university management, integration of modern educational approaches and technologies, staff evaluation, teacher professionalization, classroom consultation, etc. Graduate employability is considered an interesting and good indicator of achieving a competitive higher education system, but the way it is currently measured does not seem valid to many stakeholders.

Linking higher education, science and innovation is intended, but seems to be possible only for strong research universities. There is a general impression that the number of state grants is too low to guarantee access to higher education. State Universities in particular argue that the lower rate of State Grants hardly covers the costs of education, especially if the quality of education is supposed to increase.

Regarding the previous question, it seems that the (actual) cost of education (per program and/or institution) needs to be calculated. Only strong universities that collaborate with research institutes seem to be more successful in obtaining public funding for research. The ministry appears to be more optimistic about the revenue-generating ability of companies than universities.

National procurement regulations have been found to be too restrictive as they focus only on the lowest price offer and not on quality. In order to focus strongly on high-quality education, there seems to be a need for more people with good managerial skills, both at the central leadership level and at the faculty level.

The way forward for higher education in Kazakhstan

  • Strengthening the quality and performance of teaching
  • Providing highly trained graduates relevant for the labour market
  • Strengthening scientific research and its societal impact
  • Strengthening the management and monitoring of higher education and science

Strengthening the management and monitoring of higher education and science. In the following sections, we formulate a number of possible directions for the further development of higher education in Kazakhstan and how this can be supported by financing arrangements. The quality of teaching and learning is crucial for the further development of higher education in Kazakhstan. Because the student population makes up a substantial part of the youth – demonstrating a good higher education participation rate for Kazakhstan – the tuition-driven system does not lead to an elite system.

In general, the heavy reliance on tuition fees made Kazakhstan's higher education system a highly market-driven system. In addition, one can differentiate in the level of funding given to different disciplines (Deen et al., 2005), or - what is currently happening in Kazakhstan's higher education - between different types of institutions. As such, moving to a full voucher system in higher education in Kazakhstan still requires a number of difficult decisions to be made.

If vouchers are used to stimulate equal access, this may require significant additional investment in the higher education system of Kazakhstan. The funding formula in Dutch higher education covers around 65% of the teaching budget and is relatively simple. Another alternative to increase the quality of Kazakhstan's higher education is to consider the possibility of charging tuition fees to all students.

In addition to stimulating equity of access (Canning et al., forthcoming) this could increase the current level of funding in Kazakhstan's higher education. However, since only 27% of students study at a State Grant institution, State Grants can only stabilize and dynamize a quarter of the higher education system. This ambition has not only been officially formulated in the national higher education strategy (SPESD), but has also been addressed by some of the interviewees in the Roadmap project, especially by representatives of national universities and prestigious private universities (SHA).

We will briefly discuss two main types of such instruments that may be of interest in the context of Kazakhstan's higher education. In order to understand the financing mechanisms, their strengths and weaknesses, as well as their work in practice, a number of 15 interviews were conducted with key stakeholders in Kazakhstan's higher education system. Instead, the paper has identified key features of the current funding model for higher education in Kazakhstan and assessed how these align with the strategy.

Figure 5: Finnish university funding model (Halonen, 2014)
Figure 5: Finnish university funding model (Halonen, 2014)

Сурет

Table 1. Data sources
Figure  1:  Framework  for  analysing  higher  education  funding  arrangements  (Vossensteyn,  J.J.,  2015)
Figure 2: Funding options for allocating public funds to HEIs
Figure 3: Kazakhstan’s HEIs according to the type of ownership and operation
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