Universities' reliance on tuition fees impedes equal education access

In 2022, there were five Vietnamese universities that earned over VND1 trillion (US$42 million) in revenue, including the public-run Hanoi University of Science and Technology and University of Economics Ho Chi Minh City, according to data from the Ministry of Education and Training. The rest are privately-run FPT University, Van Lang University and HCMC University of Technology.

Hanoi University of Science and Technology’s 2021 annual report indicates nearly VND1.43 trillion ($60 million) in revenue, of which tuition fees are over VND775.8 billion, accounting for about 54.4%. The rest includes national budget, budget from the Support for Autonomous Higher Education Project (SAHEP), revenues from scientific research projects, utilization of school facilities and other service fees.

Tuition fee accounts for 73.6% of the total revenue of the University of Economics HCMC in 2021, while the rest comes from consultation, research, technology transfer and training activities, and other activities including high-quality training programs, international cooperation, student and lecturer exchanges. The university does not indicate whether they receive national budget.

Can Tho University’s 2022 total revenue was just over VND1 trillion, with tuition fees and other fees accounting for nearly 50%. The university faced a national budget cut of nearly 40% compared to 2021. The HCMC University of Industry and Trade no longer receives the national budget, so tuition fees become their essential income.

According to a World Bank conference report on university autonomy in April, the national budget accounted for one-quarter of the total revenue for Vietnamese public universities in 2017, while students’ contribution (tuition fees) accounted for 57%. However, by 2021, the tuition fee proportion rose to 77%, while that of the national budget was only 9%.

The scenario of revenue of public universities being increasingly dependent on tuition fees, while the national budget for higher education is quite low, contrasts with those in other countries, experts said.

Three main sources of revenue of universities include governmental budget, tuition fees and other sources of income (from technology transfer, service activities, donation, public-private cooperation and so forth), according to a World Bank conference report on university autonomy in April.

According to the U.S. National Center for Education Statistics, only 20% of U.S. public schools' revenue comes from tuition fee and other expenses from learners, while governmental subsidies account for 43% for the 2019-2020 academic year.

In New Zealand, 42% of university revenue comes from the government through tuition subsidies, 28% from tuition fees and 30% from scientific research, commercialization, and other sources, according to Universities New Zealand.

In Australia, nearly 35% of university revenues in 2020 came from the government, according to the Australian Department of Education.

Vietnam is among the group of countries with the lowest state budget for higher education. According to the Ministry of Finance, Vietnam's state budget for higher education in 2020 was less than VND17 trillion, accounting for 0.27% of the GDP. However, the actual spending was only about 0.18% of GDP, Hoang Minh Son, Deputy Minister of Education and Training Vietnam, said last year.

Governmental budget for higher education is very limited, stated Tran Xuan Nhi, Vice President of the Association of Universities and Colleges of Vietnam, former Deputy Minister of Education and Training.

"Universities have to charge higher tuition fees to survive, despite knowing their mismatch with people's living standards," said Nhi, adding that higher tuition fees cause inequality in education, making it difficult for low-income people to access higher education, thereby affecting the educational quality and hindering economic development.

Universities' overwhelming reliance on tuition fees also raises concerns about financial unsustainability in tertiary education and increasing inequality in access to university education, warned World Bank experts, suggesting that Vietnam needs to increase its spending on higher education from 0.23% to at least 0.8% of GDP by 2030.

It is challenging for universities to diversify their sources of income, as two main activities of a university are teaching and research, said Nhi. Without funding, it is already difficult to promote scientific research activities, not to mention applying the research into production to produce long-term profits.

"If university autonomy is still equated with having complete financial autonomy, universities still have to rely the most on tuition fees to survive," said Nhi.