Editorial: Prudence Needed When Raising Tuition Fees – 20240624 – English – Daily Ming Pao

In the mid-1990s, tuition fees for Hong Kong’s subsidised universities rose for three consecutive academic years, from $24,000 in the 1994/95 academic year to $42,100. However, since the year 1997/98, there have been no increases, and tuition fees have remained at the same level.

Before the Handover, the Executive Council decided in 1996 that the tuition fees of subsidised universities should be set at a rate sufficient to recover 18% of the average student unit cost (i.e. the so-called cost recovery rate). However, this target would often be missed, and as time passes, the shortfall has become increasingly wide. The current cost recovery rate of university tuition fees is about 13%. The Education Bureau predicts that it will drop further to a low level of 12.5% in the next academic year (2024/25 academic year).

Earlier this year, Education Secretary Christine Choi mentioned the need to adhere to the 18% cost recovery rate and maintain financial discipline, hinting that tuition fees would be adjusted gradually. After months in the making, the specific plan was officially unveiled yesterday (20 June). Starting September next year (that is, from the 2025/26 academic year), the annual tuition fee per student for full-time undergraduate as well as taught and research postgraduate courses funded by the University Grants Committee (UGC) will gradually increase over three school years. From the current $42,100, it will ultimately rise to $49,500 in the 2027/28 academic year, translating into an average annual increase of 5.5%. Chief Secretary for Administration Eric Chan has described the increase as “moderate”.

Post-secondary education in Hong Kong has been expanding since the Handover, and the number of subsidised degrees has skyrocketed. At the same time, the cost of teaching has also continued to rise. In the past, when the booming economy swelled the government’s coffers, no doubt the government had ample fiscal room to avoid raising tuition fees. But this is no longer the situation. The authorities’ proposal for an extra $200 per month from each student will not create a hefty economic burden. Overall, it can be considered acceptable.

Of course, the fee increase affects different students to different degrees. In theory, underprivileged students under serious financial stress can apply for full-rate subsidies and low-interest loans. It is therefore unlikely to create a major impact for them.

On the contrary, students from the “sandwich class” will possibly suffer the most from the tuition fee rise. If they decide to apply for loans to pay their tuition fees through the authorities’ Non-means-tested Loan Scheme, they will have to pay more interest when repaying in instalments after graduating. The government should consider adjusting the annual interest rate of the loans or extending the repayment period, so as to relieve the pressure on graduates to repay their student debts.

The fundraising capacity of subsidised universities in Hong Kong varies, so tuition fees have always been a major source of funds for the operation of universities. Generally speaking, the cost of education in the humanities is relatively low, while the cost of disciplines such as medicine, science and engineering is relatively high. The notion of charging different tuition fees for different disciplines, i.e., aligning the calculation of tuition fees of different disciplines with the respective costs, has certain justifications and deserves the authorities’ careful consideration.

Ming Pao Editorial 2024.06.21: University fee increases are prudent and take into account students’ affordability

The government announced that it will increase university tuition fees in three years, with an average annual increase of 5.5%.

In the mid-1990s, tuition fees for subsidized universities in Hong Kong were increased for three consecutive academic years, from NT$24,000 in the 1994/95 academic year to NT$42,100. However, there has been no increase in tuition fees since 1997/98, and it has remained so to this day. .

Before the handover, the Executive Council (now the Executive Council) decided in 1996 that the tuition fees of subsidized universities should be set at a level of 18% (i.e., the cost recovery rate) sufficient to recover the average student unit cost. However, the standard was often not met. Over time, , the gap becomes wider and wider. The current cost recovery rate of university tuition fees is about 13%. The Education Bureau predicts that the rate will further drop to a low level of 12.5% ​​in the next academic year (2024/25 academic year).

Earlier this year, Education Secretary Cai Ruolian said that fiscal discipline of recovering 18% of costs should be observed, hinting that tuition fees would be adjusted “step by step”. After several months of deliberation, the specific plan was officially released yesterday. The tuition fees per student per academic year for full-time bachelor’s degrees, postgraduate courses and research courses funded by the UGC will be from September next year (i.e. the 2025/26 academic year). It will be gradually increased in three school years, from the current NT$42,100 to NT$49,500 in the 2027/28 school year, with an average annual adjustment rate of 5.5%. Chief Secretary for Administration Peter Chan Kwok-kee described the increase as “moderate”.

Since Hong Kong’s return to the motherland, the scale of post-secondary education has continued to expand, and the number of subsidized degrees has increased significantly. At the same time, teaching costs have also continued to rise. In the past, when the economy was good, the government coffers received a lot of money, and of course they had ample fiscal space to avoid raising tuition fees. However, the situation is no longer the same. The authorities now propose that each student will have to pay about $200 more per month on average. The additional financial burden is not too great and is generally considered acceptable.

Of course, the impact of fee increases on different students will inevitably vary from person to person. Poor students with severe financial difficulties should be able to apply for full subsidies and low-interest loans. I believe the impact of fee increases on them will not be great.

In contrast, sandwich class students may be the group most affected by the increase in tuition fees. If they decide to borrow money to pay tuition fees through the government’s non-means-tested loan scheme and repay in installments after graduation, they will have to pay more interest. . The government should consider adjusting the annual interest rate of loans or extending the repayment period to reduce the pressure on students to repay their student debt after graduation.

The fundraising capabilities of various subsidized universities in Hong Kong vary, and tuition fees have always been a major source of university operating funds. Generally speaking, the cost of education in the humanities is relatively low, while the cost of medicine, science and engineering is relatively high. Different disciplines charge different tuition levels. Calculation based on their respective costs has certain justifications and deserves careful study by the authorities.

■ Glossary New Words /

shortfall : if there is a shortfall in sth, there is less of it than you need or expect

(sb’s) coffers : the money that an organisation, government, etc. has available to spend

hefty : (of an amount of money) large; larger than usual or expected