In Hong Kong’s public-sector organizations, it is hard to recall an example in which fees and charges for services have stayed the same for close to three decades. Such a situation has found a parallel in the annual tuition fees payable for full-time undergraduate study programs at the universities funded by the Hong Kong Special Administrative Region government through the University Grants Committee (UGC). Since the mid-1990s, the administration has set the tuition level at 18 percent of the total cost of an undergraduate place, known as the “target cost recovery rate” — the portion of costs incurred by local public universities but met by tuition fees.
The tuition fees for bachelor’s degree studies offered by UGC-funded universities have remained the same for 27 years — a period during which the Composite Consumer Price Index has gone up by around 40 percent — which is long enough to justify a review for adjustment. To the government, the financial cost of higher education is rising continually, and it is imperative to safeguard long-term fiscal sustainability while actively promoting development in the education sector to enhance the city’s high-quality manpower base. Under the government’s plan, an upward revision of universities’ tuition fees for undergraduate education will be distributed over three years from the 2025-26 academic year, targeting an increase of 5.5 percent per annum. Calculated in this way, tuition fees for bachelor degree programs will grow from the current level of HK$42,100 ($5,392) to HK$44,500 in 2025-26, HK$47,000 in 2026-27 and HK$49,500 in 2027-28, or an uptick of almost 17.6 percent over a three-year period. The fee hikes will improve the cost recovery rate to 13.4 percent from 12.5 percent.
Holding that the “very modest” fee adjustment does not deviate from the government’s continuing drive to strike a necessary balance between the SAR’s fiscal discipline and the provision of affordable higher education for students, Chief Secretary for Administration Eric Chan Kwok-ki said the fee hike has nothing to do with the prevailing public budget deficit, adding that the tuition fee level has remained unchanged for over 20 years and there is an obvious need to raise it closer to the targeted cost recovery rate. He disclosed that no plans have been contemplated for raising tuition fees further after the next three academic years.
It needs to be pointed out that not all fee revisions are automatically objectionable. For the case in point, tuition fees have not changed for 27 years despite a policy of recovering from undergraduate students 18 percent of the operating cost of each first-degree-level study place. The government in its previous terms, therefore, owes the general public an explanation for its failure to follow up in this area. This has elicited complaints over fairness from students currently enrolled in courses or waiting to be admitted to bachelor’s degree programs at public-sector universities since they regard themselves as shouldering the highest portion of the tuition fee adjustment, which they believe should have been spread over a longer time.
This group of students has been told that the running costs of their university education are escalating, and that any upcoming fee adjustments will be determined on this basis. This will lead them to wonder whether they have the power and authority to intervene in the spending of the universities they attend. As a case in point, one university is reportedly considering appointing nine vice-presidents, along with over 60 staff positions in the president’s office. In the face of such a mammoth and costly undertaking, for which students will have to share the financial burden through increased tuition fees, can students and their parents effectively advocate a policy to the contrary? The UGC, which advises the government on the development and resourcing of local universities, seems to have a case to answer so that students’ rights are properly protected.
Universities have reportedly amassed substantial financial reserves from running self-financing programs. In the spirit of deploying resources to serve the students’ best educational interests, there is a strong case for these accumulated surpluses to be plowed back into the mainstream operation of the universities, a strategy that will help reduce the pressure to collect higher tuition fees from students.
It is pleasing to note that the authorities have undertaken to make, in the light of the announced tuition fee increase, adjustments in the offer of the means- and nonmeans-tested financial aid, including loans and grants, to eligible full-time students at UGC-funded universities to ensure that they will not be deprived of the opportunity to receive higher education through lack of means. In this regard, the government will find it necessary to accurately assess the extent to which students from the lower- and middle-income families will be unfavorably affected by the new fee structure since such “sandwich classes” will not be given student grants but only loans.
Along with the fee review, there is the need to address the call for fee charging by individual subjects offered at universities, a system of fee fixing extensively adopted in many countries and regions, such as Singapore. It is understood that the average unit subsidy for the public-sector undergraduate population is HK$310,000. There are, however, substantial differences in annual subventions across subjects, which vary from slightly over HK$200,000 for some humanities programs to over HK$500,000 for medical disciplines. It is understood that the government rejected, following a study in 2000, the idea of differential charging for undergraduate programs. The city’s higher education landscape has changed immensely over the past 20 years and there are valid grounds for revisiting this policy.
Last but not least, the 18 percent cost recovery rate should be reviewed, taking into consideration the changes that have occurred since in the operation of local universities in relation to their financial strength, student population, sustainability of resources from public coffers, community support and expectations and others. If 18 percent was not the magic number, then at what level should the rate be set to fit in well with the operating and developmental needs of universities? The objective is to lay down a framework for the universities to gather sufficient steam to proceed on their paths to become outstanding global institutions of academic teaching and research.
The author is a member of the Chinese Association of Hong Kong and Macao Studies.
The views do not necessarily reflect those of China Daily.
