DILIMAN, Quezon City — Citing that the free tuition provided in state universities and colleges (SUCs) and local universities and colleges (LUCs) have unintentionally put private higher education institutions (HEIs) at a disadvantage, the Philippine Institute for Development Studies (PIDS) is recommending the shifting from a system that funds schools to one that directly provides financial assistance to students.

This was highlighted in a recent study titled 'Financial Sustainability of Higher Education Institutions in the Philippines: Issues, Challenges, and Opportunities' authored by PIDS senior research fellow Connie Bayudan-Dacuycuy, University of the Philippines Diliman assistant professor Herisadel Flores and De La Salle University professor Arnel Onesimo Uy.

In a joint statement, the study authors adviced that the educational subsidy under the Universal Access for Quality Tertiary Education Act (UAQTEA) can be redesigned by transitioning to a voucher system or a socialized tuition fee model to support both students and schools.

"While competition improves the quality of educational products and services, some policies embedded in the UAQTEA, like the free tuition fees in SUCs and LUCs, have unintentionally favored public HEIs," the authors pointed out.

"Providing financial aid directly to students would empower them to choose the school that best fits their needs, creating a more equitable, accessible and sustainable higher education system," they argued.
This approach, they explained, would also help public and private HEIs complement each other and make better use of public funds.

Bayudan-Dacuycuy, Flores and Uy also stressed that the importance of ensuring the financial sustainability of higher education institutions, which is vital to the country's development.

"Higher education institutions play a key role in the nation's progress and in achieving international goals, so their financial stability is crucial to delivering quality education," they asserted while recommending to the government to implement long-term policies to align HEIs' development plans with the country's broader goals, allowing both public and private schools to invest strategically in infrastructure and human resources.
"The lack of legal entity and fiscal autonomy for LUCs limits their capacity to engage in long-term development planning and leaves them vulnerable to political partisanship," they noted.

In ending, the study authors recommended the enactment of a national legislation to provide LUCs with the financial and operational independence needed to thrive.

"If correctly implemented, regional university systems (RUS) can improve resource use and enhance the quality of education. It is important to learn from existing RUS models and tailor them to local needs," they concluded.