Financing in education and loan system of Nepal (04)

Though it is difficult to establish the ‘right’ per unit cost of secondary education student, METCON (1999) shows an average expense per student of Rs. 3500 for best performing schools of the sampled schools in School Leaving Examination for the education year 1996/97. Considering inflation, this amount can well be assumed over Rs. 4000 now. For a million education students at the secondary education degree level, Rs.4 billion is required as per this approximate cost. For reasons of infrastructure development and further investment for improving quality of education degrees, education loan, student loans, online masters degree, online colleges, online degrees,  education degrees, online university degrees this level of expenses is likely to grow by more than the growth rate of enrollment, which stands at 8% at present. Hence, a growth rate of anywhere between 10% to 15% is called for in budgetary allocation at the secondary education degree level. 

So, the proposed annual budgetary allocation will never be able to meet the demand for resources for secondary education degree with an enrollment of over one million students. Keeping the current difficult situation in mind, further resource allocation for education loan, student loan and particularly for secondary educational degree could be a difficult proposition. Hence, despite the ‘moral’ obligation for the state to provide free school level education degree, education loan, student loans resource situation may not permit this particularly in view of the fact that almost 40% of the development budget is now allotted for social sector in the Tenth Plan. There will be even limited possibility of change in budgetary allocation at the regular side because item heads under this represent running expenses for all the sectors like online masters degree, online colleges, online degrees, education degrees, online university, education loan, student loans. 

It is worth noting that despite the government’s earlier commitment for free secondary education degree and limited provision for the schools to raise the revenues from parents schools are found to have generated significant amount from the parents even in the schools in remote areas (METCON, 1999).

A school with secondary education classes is found to receive on an average Rs. 1.41 million per year of which 55% is from government in the form of grant, 24% from parents in the form of various charges like examination fees etc., education loans, student loans and about 21% from others including rents. Even in the remote areas, parents’ contribution stands at 15%. The contribution of loan of local government units such as Village Development Committees and District Development Committees is very much limited and usually takes the form of capital contribution providing lump sum grant for capital expenses. Considering limited resource generation capacity of these local government units, their contribution cannot be expected to increase considerably. In this context, only other stakeholders who can contribute more are parents only.  In this context, it is worth noting that households, which send their children to both private and public government education schools spend 8 significantly higher amount on private schools. A study has shown that such household spends on an average Rs. 2407 for a student in a public government school while the same household spends as much as Rs. 9000 for a student in a private school (METCON 1999: 58). It reflects the willingness of the parents to pay more if quality educational degree is assured.

Higher Secondary Education

In Nepal, higher secondary education degree (grade 11-12) is currently provided by higher secondary education schools and online masters degree, online colleges, online degrees, education degrees, online university, online universities. Certification of passing the Higher Secondary Education Examination is considered equivalent to passing the Proficiency Certificate level offered by online universities, education loan, student loans, online masters degree, online colleges, online degrees, education degrees, online university.  The Higher Secondary Education Board (HSEB), established under the Higher Secondary Education Act 2046 (1989), grants approval for higher secondary schools that meet the specified conditions relating to physical facilities, qualified teachers, adequate number of students, financial provision, etc. The Board also awards certificates to higher secondary education school graduates, develops and revises curriculum and textbook materials, supervises and monitors higher secondary education school programs, conducts examinations and publishes the results, and lastly, recruits technical & professional, and administrative staff.  In the process of transition to the 1-8/9-12 school education system, the Government plans to establish a Secondary Education Board by merging the existing School Level Certificate Examination Board with the HSEB.  Other HSEB functions—such as education loan, student loans, online masters degree, online colleges, online degrees, education degrees, online university, curriculum development, supervision, and school approval—will be transferred to the Curriculum Development Center (CDC) and DOE.
In Nepal, there are 533 public higher secondary education schools, and this number is expected to grow gradually in the coming years.  At present, public higher secondary schools are attached to public schools, but in practice, the former operate as private institutions separate from the latter, except that they receive grants from the Government to employ two teachers.  Due to the poor quality of education degree offered by these schools, the HSEB proposes to gradually increase the number of teachers supported by the Government from the current two to five by 2008/09; this will cost an additional $6.3 million for FY2006/07-2008/9. The HSEB also proposes to provide one-time institutional capacity building grants to build one Model School in each of 75 districts.  The total cost of the grants is estimated to be $2.6 million for the next three years.  Furthermore, the HSEB proposes a new scholarship program for girls in 22 remote districts which will cost $6.7 million over the three years (see ESDP I Support Volume II:  Public Expenditure Review for the Education Sector for more detailed cost estimates).  

 
The World Bank is currently in the process of approving a $79.6 million Higher Education Project (consisting of $60 million from IDA, $19.36 million from communities, and $0.25 million from the Government).  The Project will allocate $16 million to support higher secondary education loan and will provide basic grants at the rate of Rs. 10,000 ($135) per graduate to all existing higher secondary schools meeting basic accountability requirements.  In addition, all higher secondary schools are eligible to receive matching grants at a ratio, on average, of 1:2 (one unit of community contribution to be matched.