No. 46




The Role and Quality of and the Bases for Funding Higher Education

14 December 2022


RiTo No. 46, 2022

  • Margit Sutrop

    Margit Sutrop

    Higher Education Support Group of the Riigikogu, Chairman; University of Tartu, Professor

  • Hanna Kanep

    Hanna Kanep

    Executive Secretary, Universities Estonia

  • Allan Aksiim

    Allan Aksiim

    Federation of Estonian Student Unions, Public Policy Advisor

  • Tiia Randma

    Tiia Randma

    Estonian Qualifications Authority, Member of the Board

  • Yngve Rosenblad

    Estonian Qualifications Authority, Head Analyst / Development Manager

  • Aune Valk

    University of Tartu, Vice Rector for Academic Affairs

MARGIT SUTROP, Higher Education Support Group of the Riigikogu, Chairman; University of Tartu, Professor

There are 18 institutions of higher education in Estonia. Their task is to offer higher education based on cutting-edge scientific knowledge, to train specialists and managers with higher education in specialities necessary for the state and society, to be innovation engines, to engage in ethnic sciences, to make a contribution to world science, and to carry out a knowledge transfer into society. Estonia’s global competitiveness, the sustainability of the Estonian language and culture, and the future of the statehood of Estonia will depend on the quality of the Estonian higher education.

The Estonian Education Sector Development Plan 2021–2035 sets the target of increasing the proportion of people with a tertiary education among 25–34-year-olds to 45 per cent. The starting level in Estonia was 43 per cent in 2020. A high proportion of countries in the world are ahead of Estonia.

Higher education has a value for people and culture as well as for society. Higher education is a major guarantee for a happy life for every citizen, the sustainability of culture and national competitiveness. Higher education, as a general rule, ensures material and spiritual well-being and a longer life. People with higher education are therefore lower cost to the social system.

Higher education in native language creates a national intelligentsia, shapes and secures cultural identity, and gives an impetus to the establishment of native-language (research) terminology, and a language in which to think and communicate. Higher education institutions help create a cohesive, safe, peace-minded, entrepreneurial and developing Estonia that is mindful of the natural environment, that upholds and promotes the linguistic and cultural heritage of its ancestors but also looks boldly to the future. Through higher education, increasing competitiveness of a country is ensured: the capability to establish and implement new technologies for both economic development and increasing people’s wellbeing.

The principle of free Estonian-language education is beautiful but the prerequisites for it have not been fulfilled. First, students need to have sufficient income even to study for free. The current student loan and allowance system does not ensure that. Second, a prerequisite to providing high-quality free education is to determine a fair price for it.

On 26 October 2021, concern for the future of higher education in Estonia brought together 30 members of parliament who established the Higher Education Support Group in the Riigikogu with the aim of developing a cross-party solution to ensure the sustainability of higher education. On 10 November 2021, the support group organised a public seminar on higher education.

The Management Models of Universities, and the Next Generation and Salaries of Teaching Staff

HANNA KANEP, Universities Estonia, Executive Secretary

A person can become a member of the teaching staff with a doctoral degree after a 21 years’ worth of education investment. Low income and the status of student, and a poor salary perspective as a member of teaching staff have been dragging down the attractiveness of doctoral study for years. A half of the plan to break this trend is in the Riigikogu and will hopefully be implemented from this autumn. Doctoral students will become junior research fellows with the average salary in Estonia. Universities have shown that an ensured income and more demanding evaluation yields results – the proportion of those who complete their degree in six years has increased from one fifth to one third.

We do not know how much this picture is affected by the increasing demand in the private sector and the low salaries in the higher education sector. The salary perspective in universities is the lowest especially at the beginning of the career and on posts with a focus on teaching which is also connected with general discontent with working conditions and workload.

The baseline funding for research accounts for 2–9 per cent and national research grants account for 0–13 per cent of the revenues of various universities. Universities with a significant volume of research (University of Tartu, Estonian University of Life Sciences, and the Tallinn University of Technology) can mitigate the salary problem from the increase in research funding by replacing study with research. This has been done partially. For example, in the new career model of the University of Tartu, the posts of associate professors were redefined, and this involves a greater research obligation and a responsibility to bring in project money.

An increase in public funding of research gives the state a greater role in directing domestic research activities. In the Estonian higher education, the state as the only big investor has a determining responsibility for the education of nearly every second Estonian inhabitant, as well as for the next generations of teaching staff and researchers. In terms of the higher education funding, it is worth discussing whether the volume of the current doctoral study is in line with our objectives.

Estonian Student: Work, Allowances, and Mental Health

ALLAN AKSIIM, Federation of Estonian Student Unions, Public Policy Advisor

The majority of the Estonian students work; most of them do so in order to cover their living costs (78% of students). Since the higher education reform that came into force from 2013, the employment rate of students has largely remained unchanged.

However, there are more reasons for working than the need to cover living costs. A student may wish to obtain work experience and to raise their quality of life.

In Eurostudent reference countries, students work and study for an average of 47 hours per week, but in Georgia, Malta and Estonia they study and work for an average of 53 hours and more in total. Estonian students dedicate an average of 39 hours per week to their studies, and the students work for seven hours less, that is, for 32 hours. It is also significant that Estonian students also receive a considerable proportion of their income from the work they do – the income from work per month in Estonia is higher on the average (64%) than the pan-European average (52%); as regards neighbouring countries, the indicator is at an approximately equally high level in Lithuania (65%).

Students can generally receive three types of financial support from the state during their studies: a need-based study allowance, a specialty scholarship or a performance scholarship, and a study loan.

Student allowances and scholarships have the greatest visible impact in doctoral studies. In spite of this, the small amount (660 euro from the state plus an additional allowance depending on the university) and the fact that doctoral students are too often employed in jobs unrelated to their doctoral theses has been considered a sufficiently big problem so that a reform of doctoral studies is being implemented under the leadership of the state and with the support of universities. The relevant Bill is currently in the Riigikogu. 

Higher Education and the Labour Market in View of OSKA’s Projection of the Need for Labour and Skills

TIIA RANDMA, Estonian Qualifications Authority, Member of the Board
YNGVE ROSENBLAD, Estonian Qualifications Authority, Head Analyst / Development Manager

The future labour and skill projection system OSKA prepares projections of the need for labour and skills in a ten-year perspective for the economy as a whole and in all areas of life and compares them with the training offered in higher education and continuing education. Projections are prepared, taking into account the future trends, development objectives, and competitiveness. After surveys are completed, the development of sectors, economy and society, as well as the short- and long-term impact of extraordinary factors, such as the COVID-19 crisis, are monitored.

The sustainability of the higher education system is affected by the number of university-age people having fallen by two times, as the birth rate fell from 25,000 to 12,000 in the 1990s. This means that the current variety of curricula is complicated to maintain, and the number of students can be increased or even maintained at the same level on account of adult students and foreign students.

The same tendency where new generations are up to two times smaller than the earlier ones will also have a noticeable effect on the labour market in the coming decade. By 2030, there will be 47,000 fewer working-age people in Estonia in comparison with 2019, while working-age people under 40 years of age will number less by as much as up to one third.

The young generation will not be able to cover the need for new labour neither in vocational nor in higher education in the coming decade. The gap will be bridged by better employment of working-age people, a longer working life, and foreign labour, as well as automation, digitalisation, and structural changes in the economy which will increase the need for flexible study options reconcilable with work and family life.

Although the modern and future economy and society require good general skills, digital skills, and understanding of related specialities, in addition to professional competence, the need for professional deep competence will not decrease. The growing need to acquire and improve skills alongside work and private life across the lifespan is requiring universities to also offer shorter, compact and modular study units (including micro-degrees) alongside flexible forms of study and traditional curricula.

The Strengths and Weaknesses of Higher Education Funding Models

AUNE VALK, University of Tartu, Vice Rector for Academic Affairs

In a knowledge-based society, the number of students and people with higher education is considered one of the main indicators of the competitiveness of a region. Ben Ansell (2008) points out that, in higher education funding, countries face a choice where only two of three aspects of critical importance can exist at the same time. These aspects are a high university enrolment rate, fully national higher education funding, and a low total cost of higher education.

Today we are finding ourselves in a revolutionary situation in Estonia as we are having all of the three above-mentioned aspects in place. The Estonian Education Sector Development Plan 2021–2035 approved by the Government last November is planning to increase the proportion of people with higher education in the age group of 25–34 years from 41 per cent to 45 per cent. The OSKA future reports are also projecting the need for an increase in the number of people with higher education. The first preference for both universities and students is for the state to find the estimated ca 100 million euro per year (1.5% of GDP) lacking from the Estonian higher education, and for us to preserve the Nordic free high-quality education model.

In the classification of higher education funding models, it has been said that, essentially, we can speak of two models: the free “Nordic model”, and the Anglo-American model which is also in place in Japan and Korea and where the cost-sharing of students is relatively high. A more social version of the latter model is used in the Netherlands where the cost-sharing of students is universal, but the amount is on the moderate side – 2,400 euro. The rest are using intermediate variants to mitigate underfunding. From Estonia’s point of view, the “Eastern European model” that was in place in Estonia before 2013 should also be discussed.