Financing in education and loan system of Nepal (02)

Sources of education financing in Nepal

Over the years, there is a visible shift in the financing pattern in the education loan, student loans,online masters degree, online colleges, online degrees,  education degrees, online university sector. The share of external financing has gradually gone up – from about 6% in early nineties to 27% at the end of the nineties. Looking at the composition of foreign education assistance also, there is a distinct trend of increasing share of grant assistance, which has reached to 56% in 1999/2000.

School Finance 

A 2005 study of community  schools funded education loan and student loan by the World Bank confirmed that the major source of funding for the operation of community schools education in Nepal is government grants, education loan, student loans. Most of the grants (about 97%) , student loans for education come from the central government while small amounts (about 3%) come from local government.  The grants, education loans may be remarked for teachers’ salaries, free textbooks for primary level students, and scholarships, education loan, student loans,online masters degree, online colleges, online degrees,  education degrees, online university degrees. There are also block grants, which may be spent according to the decisions of the SMCs and based on the SIP. A major category of the block grant system, student loans, education loans is the SIP grant provided to schools for implementing  school education improvement plans. It is allocated per student, subject to variation by geographical region. There is also the Performance grant, a reward grant based on performance indicators, education loans and student loans which encourages schools to raise their standards. There are also General block grants for administrative costs, such as the salaries and allowances of non-teaching staff.


Figure 3-1 illustrates the various school grants available.

There is more than one path to a SLC.  In addition to the regular students, there are exempted student and compartmentalized exams. In 2002, there were 170,000 regular, 60,000 exempted, and 74,000 compartmentalized exam takers (total 305,082).  Passes were 54,630, 3,801, and 38,500 respectively (total 96,930) yielding an overall pass rate of 31.7 percent.    Non-government sources include the school’s own resources which basically amount to the  fees  paid by  parents to  the school education. These can include   school fees, admission fees, examination fees, and sports fees. The Education Act Seventh Amendment states that no fees should be charged until after the primary level. At the lower secondary and secondary levels education, free education loan, various student loans is also mandatory  for girls, Dali children,  and children from families living below the poverty line. All other students  pay fees.

 
Some schools receive rental income, education loans ans student loans from school property while others conduct fund-raising activities to supplement the grants received. One such fund-raising activity is a  religious ceremony where a religious leader is invited to preside over a religious event; the participants donate money for attending it. The other sources are community contributions and miscellaneous sources. Table 3-9  below shows the percentage of revenue  from the different sources by level of education degrees:   primary level education receives 88 percent of  its revenue from central and local government grants financing of education,  lower secondary level, 72 percent secondary level education,  65 percent and  higher secondary education level, 57 percent.

Average Revenues of Selected Schools in 2004/05 (%).The findings in the Technical Review of School Educational degrees  were close to the above findings and showed that 84 percent of  school education loan, student loans funding sources came from the central government through the District Education Office in the fiscal year 2004/05 compared to 86 percent in  two trimesters in the fiscal year 2005/06.

So far as secondary educational degree or these level education is concerned, more than 90% of government expenses are borne by its own internal resources only. However, in view of high growth rate of enrollment of 8% at the secondary level, and also due to the need for higher investment level for improving quality of educational degrees, there is a need for increasing the government expenditure on secondary education loan, student loans, education degrees. This also calls for greater involvement of donor communities at the secondary level of education .