Introduction of tuition fees did not halt the internationalisation process of higher education institutions – room for growth in tuition fee revenue

NordenBladet — The working group set up by the Ministry of Education and Culture to monitor and assess the introduction of tuition fees in higher education has completed its work. The working group monitored and evaluated between 2017 and 2021 how the introduction of tuition fees impacted the international dimension and student flows in higher education institutions. It also collected information on tuition fees used by higher education institutions and their grant and scholarship practices.The working group is of the opinion that the introduction of tuition fees has not had long-term adverse effects on making higher education institutions more international or on the willingness of non-EU/EEA students to study in Finnish higher education institutions. The introduction of tuition fees has not brought the internationalisation process of higher education institutions to a standstill either. The number of international students fell immediately after tuition fees were introduced, but the number of new foreign students now exceeds the level preceding the introduction of the fees.In 2020, higher education institutions had more than 5,800 new foreign students enrolled in degree programmes leading to a Bachelor’s or Master’s degree. With the introduction of tuition fees, the number and ratio foreign students from among EU/EEA citizens has increased. Nevertheless, non-EU/EEA citizens still constitute a clear majority among new foreign students in Finnish higher education institutions. In 2020, 36% of all foreign students were students liable to pay tuition fees. Since 2017, the provision of foreign-language degrees has increased in higher education institutions, international student recruitment and marketing have become systematic, and application and admissions systems have evolved to cater to international needs.Different higher education institutions have made different choices regarding the introduction of tuition fees and international student recruitment. Not all higher education institutions have the same numbers of international students enrolling as before, and tuition fees are not deemed a significant source of revenue in all higher education institutions. The tuition fees sums charged by higher education institutions varied between EUR 4,000 and EUR 18,000. The most common single fees were EUR 6,000 and 8,000 for universities of applied sciences and EUR 8,000, EUR 10,000 and EUR 12,000 for universities. Higher education institutions use a broad range of grant and scholarship systems. Different categories and types of grants and scholarships are also used within the higher education institutions. Typically, the grants and scholarships consist of exemptions of different amounts from tuition fees.With the number of students liable for payment having increased, the financial return on tuition fees that higher education institutions received also grew over the period under review. The higher education institutions reported that they had collected some EUR 42 million in tuition fees in 2019–2020. However, the higher education institutions use a significant proportion of the potential return from tuition fees for student grants and scholarships. After subtracting the grants and scholarships, higher education institutions received approximately EUR 14 million in revenue from tuition fees.Some higher education institutions use grants and scholarships as a way to bring in students, which means that the grants and scholarships are typically large and awarded to multiple students. There are also higher education institutions that seek financial gain, which means that their grant and scholarship policy is stricter and the return on fees is more likely to be channelled to the higher education institutions rather than to the fee-paying students. The majority of higher education institutions aim for a balance between drawing in students and seeking financial gain. Half of the higher education institutions felt that introducing the tuition fees is economically profitable, because the fees have brought them the additional resources they were seeking. The other half of higher education institutions, instead, felt that the revenue from the tuition fees did not cover the costs incurred. Several of the higher education institutions that considered tuition fees unprofitable were also the ones to award many grants and scholarships to students.Foreign students in higher education institutions were for the most part satisfied with the services they received. Higher education institutions do not provide targeted services for students who pay tuition fees. Instead, the same services are offered to all international students. It is particularly challenging for international students to integrate into the Finnish world of work, and measures to support integration still warrant further improvement. Such development work should be pursued in cooperation between higher education institutions, regional stakeholders and various authorities.Rather than proposing amendments to the legislation on tuition fees, the working group considers it viable that the legislation leaves the higher education institutions the power to determine the amount of tuition fees and their practices for grant and scholarship systems. The working group drew attention to the fact that higher education institutions should, when making decisions, ensure that the tuition fees and grants and scholarships as a whole work in such a way that the tuition fees cover the costs of the education and provide higher education institutions with a wider funding base for broadening their international scope, as set out in the objectives of the legislation. The working group’s final report presents 15 proposals for developing tuition fees, grant and scholarship practices, student recruitment and student support.Working group’s report.Background information on the working group and tuition feesThe working group’s final report and the interim reports completed in 2018 and 2021 are based primarily on data collected by the working group, consisting of two surveys for higher education institutions and two surveys for international students in higher education institutions. In its work, the working group for monitoring and assessing the introduction of tuition fees also utilised other existing knowledge bases, statistical materials and research data.Universities and universities of applied sciences have had the right since 2016 to charge tuition fees from students outside the European Union and the European Economic Area who come to Finland to enrol in a Bachelor’s or Master’s degree programme in a foreign language. Tuition fees must be charged for students who started their studies on or after 1 August 2017.Higher education institutions themselves determine the amount of the tuition fees they charge and the practices for collecting them. However, the amount of the fee must be at least €1,500 per academic year. The revenue derived from tuition fees remains at the disposal of the higher education institutions. Higher education institutions must have a grant and scholarship system to aid students participating in the fee-charging degree programmes.