In recent years, there have been many concerns regarding the funding of education. Like in many other European countries, higher education in Estonia is largely funded by taxpayers. As a result, we have reached a situation where the higher education sector is estimated to be short €80-100 million.

As representatives of a liberal worldview, we believe that increasing the tax burden is neither sustainable nor fair. Therefore, we argue that the only alternative is to increase individuals' financial contribution and sense of responsibility. It is clear that the current model is no longer viable and the financial gap continues to widen. How can we resolve this situation and what are the possible alternatives?

One option is to introduce a nationwide tuition fee. At first glance, a tuition-based higher education system may evoke images of the dystopian model familiar from the United States, where young people pay tens of thousands of dollars for their education and often spend their entire lives repaying student loans. However, Estonia's system would not be nearly as extreme.

Let's look at the data: completing a bachelor's degree within the standard timeframe costs approximately €5,000-12,000, depending on the university and the study program. Currently, the state covers this cost, but we propose that each bachelor's student should cover 25 percent of their study expenses themselves. With a tuition fee of €12,000, this would mean an additional cost of less than €100 per month for the student. This way, we can ensure that higher education remains accessible to everyone, regardless of their economic background.

This approach would alleviate approximately 40 percent of the higher education funding shortfall. The benefits would be multifaceted. In addition to allowing universities to acquire new teaching materials, improve laboratory equipment and pay lecturers a fair salary, it would also encourage students to take greater responsibility for their education.

Given the high costs of maintaining higher education, we must incentivize young people to make more informed decisions when choosing a university program. This would help ensure that education remains high-quality and that students remain motivated.

However, the state does not have to regulate everything; universities could also be given greater autonomy. What would this mean in practice? While the government would set a standard 25 percent student contribution for all study programs, each university would have the right to adjust this percentage according to its capabilities. If a university wishes to increase or decrease the student contribution for certain programs, it would have the flexibility to do so. However, this would mean that each university would need to find its own sources of funding.

It is important to remember that universities differ from one another. One institution may need to charge higher tuition fees than another due to differences in program costs and expenditures. While universities would primarily set tuition fees based on their financial situation, the state could step in to subsidize specific fields that are in high demand in society. For example, Estonia has a shortage of qualified teachers. The government could intervene to ensure that students in teacher training programs pay lower tuition fees. This approach would allow both universities and the government to prioritize different study programs.

At the University of Tartu, for example, programs in economics, IT and law are overcrowded, meaning there are more applicants than available places. If universities had the freedom to set higher tuition fees for certain fields while lowering them for others, we could better manage student enrollment and direct students toward areas where there is greater societal demand.

A progressive society values decision-making that is as close to the people as possible because local decision-makers have a better understanding of the issues and how to address them. Universities have a clear overview of which fields are oversaturated and which lack resources and could use tuition fees as a tool to guide students toward the most needed specializations.

For all of this to work, students must have sufficient financial means to pay tuition fees, which is why reforming the student loan system is essential.

First, the maximum loan amount needs to be increased, as the current cap of €3,000 per year is outdated. The Riigikogu Cultural Affairs Committee has discussed a plan to double the maximum amount to €6,000, eliminate the requirement for a loan guarantor and lower the interest rate cap from 5 percent to 3 percent. This is a welcome plan that would significantly ease the financial burden on students.

However, we believe the maximum student loan amount should be raised to €10,000 per year to cover not only tuition fees but also most living expenses. This is particularly crucial for students who have no income or parental support but still need to pay rent, buy food, cover study-related costs and afford some leisure activities.

Currently, many students have to work alongside their studies and the existing student loan terms are so inadequate that even with a loan, they may struggle to make ends meet. If we can provide students with better conditions and easier access to student loans, they will be able to focus more on their studies rather than on financial survival.

The student loan system must also be reformed to attract more private investment into higher education. With a growing competition for top talent, it is crucial to allow private companies to finance student loans. Many corporations, such as Amazon and Wells Fargo, already run similar programs to attract skilled workers. Reforming the system would ensure that students can focus more on their studies and fully enjoy their university years while also bringing more private funding into higher education.

A tuition-based higher education system, granting universities greater autonomy and reforming student loans are essential steps to ensure the sustainability of the higher education system. Tuition fees would account for only a small portion of the total cost compared to what the state currently spends per student on education.

--

Follow ERR News on Facebook and Twitter and never miss an update!