Should the Students Freeze? Veliko Dimitrov November 2006

No matter how different is the current year from the previous one, there is always one similarity: in the Bulgarian education someone somewhere is constantly freezing in winter time. According to representatives of educational institutions, the money, which the government is allocating, is never enough for heating the buildings, thus the students (sometimes the professors as well) do not attend the classes and the problem with heating of the educational buildings becomes the central issue of debate for the Bulgarian academia. Because the low temperatures in the classrooms and university auditoriums are really a serious problem, the state is forced to allocate additional amount of money from the budget in order to handle these problems. The most recent example is the Sofia University “St. Kliment Ohridsky”(SU), whose unpaid bills for heating the state promised to clear out. The prime minister, the president and other public officials were notified about the crises situation and for a short period of time the problem became national.

The predictable explanation of the crises situation is that the budget subsidy for SU is too small to cover the expenses of the university and in order the problem not to be repeated this subsidy has to be increased. If a comparison is made though between SU and the other big university in Sofia – University of National and World Economy (UNWE), the allocated resources per student for 2006 in SU are visibly bigger:

Regardless of the biggest subsidy for SU in comparative perspective, obviously the resources were not enough. On the other side, the lower subsidy allocated to UNWE did not prevent it to assure heating, which does not mean this was or will be always the case. In other words, a direct relationship between the allocated resources and the establishment of relevant educational environment does not exist. This can be explained by the fact that the current liquidity depends on the revenue and the expenses and it is important how, when and what for the revenue is spent.

Thus, one possible conclusion would be that the way in which the academic system in Bulgaria functions is not the proper one. It is true that in Bulgaria (and not solely) the state subsidy for education are never enough to satisfy the demands of the system and its representatives. It is not a question only of having or not having heating though, the problem is deeper and goes down to quality of education, organization, effectiveness of the academic institutions, professional qualities of the professors, and so on. Should we question all the above?

One of the most prominent arguments supporting state subsidies for education is the existence of external benefits, and also the participation in the academic process of students from families with lower incomes, which would not be possible if the universities were private.

Regarding the external benefit:

These benefits exist when the consumption of the particular good/service brings benefit for the society as whole, not only for the consumer of the good him/herself. According to some people, this is the sole reason behind state subsidy for the education. But again, if the public education can teach young, smart and qualified professionals then respectively the private education can do the same. According to the world’s practice and experience, the qualification and the back-up behind the diploma is far better when received in private universities than in public ones. Respectively, the potential external benefit for the society should be bigger from the private education. In regards to the higher price of private education, it is a matter of argument too. The average semester fee in the SU is 100 lv. but we should add the state subsidy for each student of 1 788 per year, or 894 per semester. This sums up to 1000 lv. per semester. For the sake of comparison, the same price per semester in one of the Bulgarian private schools is around 800 lv. in which a free access to foreign universities’ and international organizations’ data is included, as well as limited number of free copy services. As it is clear the price per semester at the public university is much higher than the one in the private school . Another difference is that on the first place the expenses are covered by all taxpayers and after by those who benefit from them.

Regarding students from low-income families and the possibility to drop out of the education system:

• Higher competition among private universities will not only improve the provided services but will also reduce universities’ fees;

• Online education offers opportunities (if they present it in Bulgaria) for lower expenses for educational institutions and respectively lower universities’ fees;

• The private universities offer various opportunities for sponsorship through scholarships, work-study positions, etc.

• There are plenty of opportunities for financing the education by taking a credit.