Returns on higher education

Unfortunately, across most of the Asia-Pacific region, the returns on higher education are not high enough when viewed in terms of economic returns. The parallel problems of unfilled job vacancies together with unemployed tertiary graduates showed that higher education was not yielding the expected benefits.

The reason, according to the report released by the World Bank last month, was the failure of the stewards of higher education to bridge the “disconnects” between the sector and five other sets of institutions: (1) the employers; (2) the companies looking to use university research; (3) other research institutions; (4) other training providers, including the disconnect among the universities themselves; and, (5) the basic education sector.

The Philippines stood out as the deviant among the 15 countries covered in the report. While 70 percent of the students in the region enrolled in public higher education institutions (HEI); in the Philippines, 70 percent of this enrollment was in private schools. Private higher education has been expanding in the region; the Philippines has been expanding the public education sector. The Philippines also remained the only country in the region permitting entry into higher education after 10 years of basic education.

Notwithstanding these differences, the World Bank diagnosis applied equally well to the Philippines, which faces all the “disconnects” identified in the report. But the most dysfunctional and detrimental disconnect is between basic and higher education. Until this fundamental disconnect is addressed, it will be difficult for the country to bridge the gaps in the higher education system, including that between the output of colleges and universities and the needs of the employers.

Fortunately, President Aquino, responding to the call for an Education President, has committed to implementing the K12 system, a change first decided upon some 75 years ago. The delay has already caused considerable damage.

The truncated basic education cycle exerted a perverse effect on the entire educational system.  Filipino teachers have to cover in 10 years content and skills that other countries deliver in 12.  Filipino students, while studying more, were learning less; because they were not getting enough time to master basic concepts. Moving forward without mastery of the fundamentals made it more difficult for the students to absorb more advanced materials.

The report stressed the need to recruit more students into the Science, Technology, Engineering and Math program in college. Additional funding and incentives for these STEM courses would be welcome. But not enough students graduate from high school with the solid preparation to pursue STEM degrees. Academically challenged students tend to take the courses perceived to be easier to complete.

The Philippine system compensates for the deficit in basic education by extending the time required to earn a college degree. Hardly any tertiary program now can be completed in eight regular semesters of course work. Engineering, Accountancy, Pharmacy and Nursing take five years to complete. Additional time is needed because the first two to three semesters of college mainly cover materials which should have been learned in high school.

Shifting the academic burden from high school to college also shifted the cost from the government to the students and their families. The Constitution provides for free primary and secondary education in public schools. But higher education, still mainly delivered in private schools, must be paid for by private funds.

As the countries in the region expand the private higher education sector, they are likely to face some of the problems encountered in the Philippines. Variable fee structures, as the World Bank noted, offer a way of managing the burden of higher education. Private schools have greater flexibility than public schools and greater incentive to adopt this approach. But, as in the Philippines, private schools may be tempted to compete on price.

Variable fee structure is key to private school strategy, particularly if they are for-profit organizations. But this strategy places educational systems on a slippery slope. Without careful stewardship, the government will find itself dealing with diploma mills. And without scholarship funds, not just the academically challenged, but also the financially challenged students, will avoid the STEM courses, which tend to be more expensive.

The World Bank commended the improvement across the region in the access to higher education. But it recognized the trade-off, under conditions of resource constraints, between access and quality, a point politicians often ignore. They demand quality from the educational institutions, even world-class quality, but the political default mode favors quantity. It is easy to keep track of enrollment figures. Quality is more difficult to measure and monitor.

Low- and middle-income countries in the region have suffered, in the assessment of the World Bank, from the governments’ poor management and stewardship of the higher education sector. Its timely report validates the agenda that education reform advocates in the Philippines have been pursuing.

Finally, the government appears to be listening and responding.

Edilberto C. de Jesus is president of the Asian Institute of Management.