


No first-timer quota for the funding model for universities
STATEMENT
Request for comments on the draft decrees concerning the reform of the funding model for universities
- Section 5 of the draft decree states that 81 per cent of the basic funding referred to in the Universities Act, Section 49, subsection 3, would be determined based on the extent, quality and impact of activities, with 19 per cent determined based on other objectives in education and science policy (strategy-based funding and national duties). The draft sets the share of funding awarded based on education at 44% (currently 42%) and the share of funding awarded based on objectives in research and science policy at 37% (currently 34%).
Do you consider the balance between the different criteria for funding in the proposal suitable?
- Yes
- No
- No opinion
- Views, proposals for changes and other comments on proposal 1:
Justifications: HYY does not consider increasing the emphasis on research in the funding model simply because funding will be increased due to new RDI legislation to be the right move. This is because the RDI funding will not be allocated through the funding model for universities.
- The draft decree includes the addition of a new criterion for funding that is based on new students who have not previously completed a higher education degree under the Finnish education system nor accepted a student place leading to a higher education degree to the share of funding awarded based on education (Section 6).
Do you consider the proposal suitable?
- Yes
- No
- No opinion
- Question 6 deals with the share of the funding criterion separately.
- Views, proposals for changes and other comments on proposal 2:
Justifications: In no way, shape or form does HYY support the addition of an indicator based on the number of first-time students to the funding model for universities. Being a first-timer is already emphasised in student admissions. Even the government’s memorandum states that communication on student admissions is needed ‘to improve the prospects of young people and to avoid delaying the transition from secondary to higher education due to fear of losing one’s first-timer status’. However, adding an indicator based on first-timer status to the funding model and the steering effect this has only serves to further emphasise the importance of first-timer status, as universities have very limited opportunities to affect this indicator besides raising their first-timer quotas.
Emphasising the first-timer quota creates additional obstacles for changing disciplines and puts applicants in unequal positions. This conflicts with the government’s goals concerning continuous learning. Together with lowering the multiplier for completing another degree at the same level, as described later, raising the first-timer quota will cause major repercussions that make it more difficult to change fields of study and receive re-education. At the same time, the effects of these reforms are hard to reliably predict and monitor.
- A change is proposed to the grounds for allocating strategy-based funding (Section 7): the share supporting the government’s higher education and science policy (so called programme funding) would be removed from them. In the future, strategy funding would be based on the share supporting the strategy and renewal of higher education institutions. In the future, the share of strategy-based funding would be 10 per cent of total basic funding (currently 15 per cent).
The 5 per cent share corresponding to the removal of the national programme funding that is part of the strategy funding would be moved from the share of funding awarded based on other objectives in education and science policy to the share of funding awarded based on the quality, impact and extent of activities.
Do you consider the proposal suitable?
- Yes
- No
- No opinion
- Views, proposals for changes and other comments on proposal 3:
Justifications: HYY supports the proposed change. It is good for funding to be based solely on the universities’ own strategies. This provides stronger support for the universities’ own development work and reinforces their autonomy.
Decree of the Ministry of Education and Culture on Calculation Criteria for University Core Funding
- Section 1 of the Ministry of Education and Culture’s decree and its appendix set out the following calculation criteria for the share of funding based on education as well as their relative shares:
Number of new first-time students starting their studies at the university: 3%
Number of master’s degrees completed at the university: 19%
Number of bachelor’s degrees completed at the university: 11%
Total number of credits completed in open university teaching, non-degree studies and professional specialisation education: 3%
Number of credits completed based on the higher education institutions’ cooperation agreements: 1%
Total number of points in the Finnish Bachelor’s Graduate Survey: 3%
Number of people who have completed a master’s degree at the university in employment in Finland one year after graduation: 2%
Total number of points in the national career monitoring survey: 2%
Do you consider the proposal suitable?
- Yes
- No
- No opinion
Note! The survey has separate questions on any funding criteria and their shares of funding mentioned above that would be altered in the proposal.
- Views, proposals for changes and other comments on proposal 5:
Justifications: HYY does not support the proposed calculation criteria for the shares of funding. We do not believe that adding a first-timer quota to the funding model for universities serves any purpose or is advisable based on the reasons we described earlier on the problems of the first-timer quota.
- The relative share of the new calculation criterion on the number of new first-time students would be 3%.
This would be carried out as a transfer from strategic funding (2 percentage points) and the funding criterion based on credits completed in open university teaching, non-degree studies and professional specialisation education (1 percentage point), the relative share of which would be 3% (currently 4%) in the proposal.
The calculation of the number of new first-time students would be carried out based on the realised figures of the most recent available year (in June).
Do you consider the proposal on the new funding criterion suitable?
- Yes
- No
- No opinion
- Views, proposals for changes and other comments on proposal 6:
Justifications: See the justifications listed in items 2 and 5.
In addition to this, two cuts are already targeting the funding for open university studies (decrease in the indicator for the funding model, cuts in the General Government Fiscal Plan). This conflicts with both the government’s objectives concerning continuous learning and national needs in the field of education.
- The relative shares of the funding criteria concerning the number of bachelor’s and master’s degrees completed at universities in a calendar year are kept as they are in the proposal. However, some clarifications are proposed to the calculation of the funding criteria.
Changes are proposed to the multipliers concerning the completion time of degrees and the completion of another degree at the same level used when weighting the number of completed bachelor’s and master’s degrees. According to the subsection, the number of degrees completed within the target time referred to in Section 40 of the Universities Act would receive a multiplier of 1.8 (currently 1.5) when calculating the number of degrees.
If someone who has completed a master’s degree has previously completed a master’s degree in a Finnish higher education institution, or if someone who has completed a bachelor’s degree has previously completed a bachelor’s degree in a Finnish higher education institution, the second degree would receive a multiplier of 0.5 (currently 0.7). The other multipliers used in the calculation would remain as is.
As a technical change, degrees in multiplier category 1 would no longer be listed in the appendix of the decree. Instead, all degrees that are not included in groups A (multiplier 3) or B (multiplier 1.75) would belong to group C (multiplier 1). This change would not affect the relative shares of funding awarded to different higher education institutions. However, it would help avoid unnecessary changes to the decree in the event that a new degree title not included in groups A or B is introduced during the agreement period.
Do you consider the proposal on increasing the multiplier concerning the target time (to 1.8) suitable?
- Yes
- No
- No opinion
Do you consider the proposal on decreasing the multiplier concerning the completion of another degree at the same level (to 0.5) suitable?
- Yes
- No
- No opinion
- Views, proposals for changes and other comments on proposal 7:
Justifications: HYY does not support increasing the multiplier concerning the target time to 1.8 from the previous 1.5. The previous multiplier already creates a strong incentive for universities to steer their educational processes in ways that guide students to graduate in target time. Forcing students to complete their degrees as if on a production line does not benefit the society either. The value of the education and culture gained while completing a degree does not lessen whether the degree is completed in five years or ten.
Increasing the relative value of the multiplier for the target time to almost double the value for students who graduate a year later, for instance, creates unreasonable challenges for both universities and students. Universities cannot affect all the factors that influence the graduation times of students. In major growth areas, for instance, students increasingly have to supplement their meagre income by working, which negatively affects their study progress. The government’s other policies do not help support full-time studying either. Cuts aimed at students’ social security will lead to an increasing number of students having to finance their studies by working. Increasing the multiplier is unlikely to increase the number of students graduating in target time.
Emphasising the first-timer quota does not support student admissions for higher education institutions’ master’s programmes as students applying to them generally already have a bachelor’s degree. The two measures proposed here – decreasing the multiplier for another degree at the same level and the 3-% first-timer indicator – overlap with each other. Together, these measures would add more obstacles for people changing fields of study or seeking re-education. We do not believe the 0.5-multiplier to be reasonable in terms of covering the costs caused by education.
- In terms of credits from the open university, only those completed by students with a Finnish social security code would be taken into account when calculating the funding.
This restriction would require changes to the collection of data, and it would enter into force starting from credits completed in 2024.
Do you consider the proposal suitable?
- Yes
- No
- No opinion
- Views, proposals for changes and other comments on proposal 8:
Justifications: HYY does not support the proposal. This change would decrease incentives for universities to develop new kinds of courses with broad attraction even abroad. These kinds of study modules may be highly significant in building a university’s international status and reputation, and they also benefit Finnish students. All in all, we believe that study units related to lifelong and continuous learning and re-education offered by higher education institutions should be organised in such a way that they are accessible to all learners regardless of their situation in life and wealth status.
- Section 2 of the Ministry of Education and Culture’s decree and its appendix set out the following factors and relative shares for the calculation criteria for the share of funding based on research:
1. Number of publications: 14%
2. Number of doctoral degrees completed at the university: 9%
3. International competitive research funding: 7%
4. Domestic and international research funding from companies and other domestic research funding: 7%Do you consider the proposal suitable?
- Yes
- No
- No opinion
Note! The survey has separate questions on any funding criteria and their shares of funding mentioned above that would be altered in the proposal.
- Views, proposals for changes and other comments on proposal 9:
- The relative share of the calculation criterion concerning the number of doctoral degrees would be increased to 9% (currently 8%). The funding limit on doctoral degrees in the current decree would be abandoned.
Do you consider the proposal suitable?
- Yes
- No
- No opinion
- Views, proposals for changes and other comments on proposal 10:
- The relative share of the calculation criterion on international competitive research funding would be raised to 7% (currently 6%) and the relative share of the criterion on domestic and international research funding from companies and other domestic research funding (Academy of Finland, Business Finland) would likewise be raised to 7% (currently 6%).
Research funding from domestic and international companies would receive a multiplier of 1.2 for the calculation.
Do you consider the proposal suitable?
- Yes
- No
- No opinion
- Views, proposals for changes and other comments on proposal 11:
- The proposal features the inclusion of an adjustment limiter to the calculation of funding for higher education institutions for 2025 and 2026.
Under the limiter, funding for higher education institutions – share of strategy-based funding and funding for universities’ national duties excluded – may decrease by a maximum of 3 per cent compared to the level of funding the previous year, relative to the calculational funding available in the year in question. Any possible deficit caused by the limiter would be distributed to the higher education institutions on each higher education sector in the proportion of their share of funding. A similar limiter was in effect 2021–2022.
Do you consider the proposal suitable?
- Yes
- No
- No opinion
- Views, proposals for changes and other comments on proposal 12:
Justifications: We consider the proposed adjustment limiter a good way of ensuring that the funding of any higher education institution does not fluctuate excessively from year to year. This provides much needed stability for the funding for universities.
Other comments on the proposal
- Your assessment of the effects the proposal as a whole has for higher education institutions, the higher education system and society
- No comments
- Any other remarks on the proposal as a whole or the draft decrees.
HYY considers it important that universities are distributed sufficient basic funding through the funding model. We hope that the development of universities forging distinct profiles for themselves that the government is aiming at does not lead to the operating conditions of multidisciplinary universities narrowing down and the number of such universities decreasing, as comprehensive education benefits the entire society. The crises of recent years (the coronavirus, war and the ongoing environmental crisis) reveal that predicting the skillsets needed in the future is difficult. High-quality basic research and comprehensive education improve the chances societies have of responding to crisis situations, no matter how surprising.
We believe it to be vitally important that any funding indicators forcing students to complete their degrees as if on a production line are removed from the funding model for universities. These include the multiplier on the target time and the emphasis on the number of completed degrees. Instead, the funding model should move towards measuring the number of completed credits, for instance.
As higher education and high-quality research activity require a long-term approach, reforming the funding for universities should always be based on ensuring that the funding is long-term, predictable and, above all, sufficient.
Other comments on the working group’s proposals
- The working group also made proposals that are not included in the decrees. These include the following:
The Universities Act and the Universities of Applied Sciences Act enable the Ministry of Education and Culture to grant higher education institutions results-based funding based on the institution’s successful operation. The working group proposed the introduction of a separate incentive bonus allocated to the higher education institutions outside the actual funding model to account for measures that are more difficult to measure (e.g. wellbeing at work and in studies, leadership, cooperation with interest groups). The incentive bonus would not necessarily be allocated every year. The themes the bonus would be based on could also vary from year to year.
The working group believes that a deeper assessment of major, system-level needs for change, funding and steering practices to support this and research-based support for the reform are also needed. Preparations utilising research and assessment data should be launched as soon as possible.
Possible comments on the other proposals made by the working group:
HYY believes that universities should be aware of any possible larger, system-level changes to funding and steering practices as early as possible. The funding and steering processes for higher education institutions should guide the institutions towards long-term, stable operations. Fast-paced changes to the funding model do not serve the higher education field nor the realisation of sustainable educational policy.
All in all, we believe that the development of the funding model for higher education institutions should be guided decidedly away from the current, heavily performance-oriented model that encourages universities to compete against one another and towards a model that encourages mutual cooperation instead.