Economic Policy Review ISSN 1313 - 0544

A Supreme Absurdity

Author: Peter Ganev / 29.05.2007
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In 1999 the Bologna Declaration for the creation of a European Higher Education Area was signed. This document, as a turning point in the development of higher education in Europe, was signed by 29 countries including Bulgaria. The Bologna Declaration clearly outlines the ever-growing need for greater independence and autonomy of universities as a major factor in the development of Europe.

A failed reform

Just a few hours ago the Bulgarian government manifested that it could in no way adopt these values. According to the results from the second reading in the Parliament about changes in the Higher Education Law, universities will not be able to determine on their own the tuition fees and the number of enrolled students (which means that there are no changes here), but instead at every state university a Board of Trustees will be created which will include people, outside the university body.

The establishment of these boards has been widely discussed in the social circles in the preceding month but nobody, in general, could explain for what exactly these boards are necessary (they are created by law, not by an initiative of the higher educational institution itself) and how come these boards of trustees correspond with the idea about independence and autonomy of universities? In your opinion, what can a Board of Trustees do, except "insisting" that various things should be done?

Although the interference of such a board of trustees in the administration of universities clashes with the idea of autonomy of the academic community, it was not this change that drew the attention. The entire discussion about reforming the system of higher education was initiated by the Minister for Education himself, Daniel Vulchev, who also promoted the idea to give universities the right to determine their own tuition fees and number of enrolled students. In fact, that was the excuse for the creation of a Board of Trustees. Let the higher educational institutions have more freedom in order to be able to compete effectively but, anyway, in order not to make a mess in the field let's create a Board of Trustees that should supervise and restrict "(excessive) freedom." At first sight it seemed that the above-mentioned line of thought was in balance with all standpoints and interests. However, things appeared to be completely different.

Again about tuition fees

Where has this fear of increased tuition fees come from? If there was something that intercepted the desire for changes in the higher education (if there has been such a desire at all!), that undoubtedly was the perception for potential rise of tuition fees. Medical students would almost have to pay around 4000 leva (2 045 euro) because that amount of money represented the allowance for a student of medicine. The allowance may be 4000 leva but as if everybody forgets that the right of universities to determine higher tuition fees does not mean an immediate reduction of state subsidies for students. Universities will again be financially provided for, even if they do not raise the fees. Even the first-year students in economics know about the so called equilibrium of demand and supply and nobody can afford to determine unrealistically high prices for no matter what products or services. There will definitely be universities which will increase their tuition fees but that will be as a direct result of the quality of education.

Student credit financing

One of the widespread opinions at the time of the discussions of the law and, more specifically, of the tuition fees was that the changes should be made in a moment when an active system for student credits is constructed. It is not a secret that anything like students' crediting does not exist in Bulgaria. Despite the substantial number of credits under this name, these are always connected with proof of sufficient income by the student if he/she by accident works, or by a parent who in practice repays the loan. There are a few reasons why this kind of credit, when a loan is issued to the student (the loan can be repaid by the student when he/she starts working after graduation) only on the basis of recommendations and results from the relevant university, has not still taken place in Bulgaria.

One of the reasons is directly related with the market and with the fact that our financial system is still under development, and these high-risk credits are yet to begin entering the market.

The second reason, probably the more serious one, is absolutely unrelated to the market, but is determined by the perpetual intention of the state to enter into the "credit" undertaking. Which ordinary creditor is about to invest and profit from student credits is the state, sooner or later, will start giving such credits under much simpler (not market) conditions, as the credits might not even be repaid? This anti-market behavior, which not only will not yield profits, but also will be financed through the budget, is the absolute barrier for everybody who would like to enter the market.