In the local newspapers on Sunday, March 29, there were two articles which dealt with the two aspects of financing tertiary education.

Professor Alvin Wint of the University of the West Indies addressed the vexed issue of enabling students to finance their way, and Denise Meiler in another newspaper addressed the method of subsidising the institutions. Allow me, therefore, to join the debate.

Enabling students

The Australian Higher Education Contribution Scheme (HECS) has demonstrated to the world the virtue of income contingent student-financing schemes. In this system, students are able to enjoy the benefits of higher education without being burdened with upfront cost.

They, however, are required to make their contribution after entering the workforce. The repayment is done through the taxation system and is based on their level of income.

The repayment also begins when beneficiary's income has reached a particular threshold and if at any time he or she becomes unemployed, the repayment is suspended. The tax collection system, therefore, is the vehicle which is used to ensure repayment by all beneficiaries.

The success of the HECS, say the Australians, is dependent on an efficient tax collection system. If Jamaica is to venture down the road of an income contingent loan scheme, as mooted by Professor Wint, then financing tertiary education is another reason for the urgency in reforming the taxation system of Jamaica.

The tax policy review committee in its report of November 30, 2004 states that the tax administration in Jamaica is weak. This could not be used in the system of financing tertiary education. For this reason, I urge that we address the tax administration of our land.

We have to bear in mind too that Jamaicans are migratory people; therefore concomitant with our reform of tax administration has to be a system of tracking our people as they emigrate. The pending introduction of a credit bureau with linkages to other countries is therefore welcomed.

An inability to address our tax administration and the tracking of the credit worthiness of our people will mitigate against a scheme such as the Australian model.

The second issue is that of subsidy, of which Meiler addressed. I believe that subsidy is necessary because not only does the individual benefit from education, but so does the society as a whole.

The system of subsidy for higher education that is practised in Jamaica was built on the premise of one higher education provider, UWI. The landscape of tertiary education has now changed, yet the system of funding has not.

The University of Technology, Jamaica has had the powers to grant degrees since the CAST Scheme order of 1986; The College of Arts Science and Education (CASE) has had its own powers since the CASE Scheme Order of 1995; and The MICO University College joined the fold in 2006 by an act of Parliament.

Notwithstanding that there are new entrants to the higher education arena, the methodology for channelling subsidy to institutions of higher learning has remained the same since Donald Sangster, the then minister of finance, announced in Parliament, the establishment of the 'University Grants Committee' on September 3, 1963.

Equitable subsidising

The purpose of this committee was to finance the operations of the UWI. After 46 years, I think it is now necessary that the Government reviews this mechanism and establish a 'Tertiary Commission' to manage the allocation of the State's funds to all approved tertiary institutions in a transparent and equitable manner.

Equitable distribution does suggest that, instead of the current arbitrary block grants to institutions, funds are allocated based on the number of students, relative cost for running programmes and the country's developmental priorities at a given time.

The student number basis would ensure that institutions with higher numbers are given more funds; the cost factor would ensure that the more expensive programmes with high lab costs are appropriately financed; and the priority factor would guarantee that the government remains in the driving seat to steer the education system towards the desired developmental goals.

As such, a student pursuing a bachelor's degree in business administration would get the same level of subsidy, regardless of which institution he is attending.

Likewise an engineering student, whose programme is more expensive, would get a higher subsidy than the business student but the same level of subsidy regardless of the institution being attended.

It is also my opinion that the 'per student per programme' funding would also address the concern about the implications of the General Agreement on Trade in Services (GATS) of which we are a signatory.

This agreement suggests that Jamaica would have subsidies at all institutions on the same basis as long as they are providing the service in the country.

The Ministry of Foreign Affairs and Foreign Trade expressed the opinion in a meeting on November 21, 2003 that, as long as Jamaica makes a distinction between privately and publicly funded higher education institutions, it would not be required to subsidise all providers of higher education services as it does the regional body (UWI) and its national institutions.

New approach to funding

An opinion from the Observatory on Borderless Higher Education (UK), however, seems to disagree with this position and opined that though this interpretation could apply to a purely funded governmental system, it may not be applicable to a mixed system, such as cost sharing (fee paying and government subsidy).

As such, a new approach to fund tertiary education that would enable Jamaica to honour its commitment under the GATS and at the same time assist in the country's development has to be found. The 'per student per programme' funding with the priory factor seems to be the answer.

The Government could use the priority fact to discourage those who are only interested in providing low-cost programmes that do not require capital investment from benefiting from state subsidy.

Professor Wint and Ms Meiler are correct that there is need for reforming the financing of the tertiary education system in Jamaica. The arbitrary block grant funding of tertiary institution has failed to achieve the Government's developmental goals, is inequitable and in conflict with the GATS.

Dr Kofi Nkrumah-Young is vice-president, planning and operations at the University of Technology. Feedback may be sent to kyoung@utech.edu.jm or columns@gleanerjm.com.