'Stable’ funding for higher education can harm accessibility

The proposal is being made in a variety of ways and it’s unlikely that there are any two parties with the exact same views. However, almost every single election programme states that the funds allocated for higher education should be less dependent on the number of students each institution has. The fact that parties across the board see that as a problem should come as no surprise as higher education is facing a number of problems to which more stable funding appears to offer a solution.

Problems
One of these problems is the number of international students coming to the Netherlands, which is rising year after year, resulting in overcrowded lecture halls. According to critics, internationalisation has become a business model, with universities offering more and more programmes in English to attract more students from abroad and receive more public funding because of this. They argue that institutions will start recruiting fewer students abroad the moment this financial incentive is removed.

Another problem that some believe would be solved with more stable funding is the disappearance of programmes that do not attract many students, such as Dutch Language & Culture, which is struggling in many institutions. Programmes from universities of applied sciences situated in depopulating areas have been struggling, too. Shouldn’t the government support them? To many political parties, the solution would be to ensure that universities get less "profit" when the number of students increases and reduce the blow when programmes are shrinking. The idea is to make degree programmes compete less by simply giving them enough money for what they need to do.

Research universities are keen on doing this, so much so that they have been lobbying for it. They are making their own electoral plea. Based on the programmes, it looks like the parties are listening. They refer to this stable form of funding as "capacity funding". It all sounds like it makes perfect sense.

Accessibility, a fly in the ointment
There is a catch, however. Dutch universities would like to have the autonomy to define how many students to take in.  In their electoral plea, they ask politicians to “give universities the possibility to determine their own size.” By doing this, they are clearly acknowledging that academic education is overcrowded right now. In an interview with the Dutch newspaper Trouw, Elmer Sterken, former rector of the University of Groningen, estimated that only fifteen percent of students in the Netherlands are enrolled in a university of applied sciences, while the rest are attending research universities. Capacity funding would be part of the solution.

Yet, if you ask universities what this means exactly and what capacity funding should look like, the explanations remain pretty vague. They often reply that that’s something they still need to work on, which is why there are two committees dedicated to the topic. 

Referral
Jouke De Vries, current President of the Executive Board at the University of Groningen, says his view on capacity funding is that students would be guided to the place where they can reach their full potential. “You should be able to refer students from universities of applied sciences to research universities and vice-versa,” he suggests. “In the most radical form, you should even be able to offer a joint bachelor, or a joint first year, in which it becomes clear whether a student is academically or practically inclined.”

In his view, it may be necessary to introduce a "coordination mechanism" that takes into account the varying situations among universities. It would be up to the universities to define the maximum number of students they can take and ask for the appropriate level of funds.

Academic enough?
The big question remains: what will this look like in practice? No one is against giving people the right information and a university of applied sciences may be a suitable choice for some of the people attending pre-university education (VWO). But who is going to make that call, the prospective student or the university?

At the end of the day, it comes down to the following: universities would like to be able to limit access to academic education as they see fit. A pre-university (VWO) diploma would be no longer sufficient to partake in academic education. First, someone else is going to determine whether you are suitable or not.

But universities are already doing that. Many programmes have their own selection processes, designed to only admit the most suitable students. The problem is that this selection seems to be rather arbitrary. “Degree programmes that make selections generally set up and operate their selection procedures with the best of intentions”, the Inspectorate of Education wrote last January. “But everyone devises those procedures in their own way and at their own discretion, without consensus on what constitutes fair and effective selection.”

In that case, should we allow selection to play a greater role? Can you rely on the universities to really know who constitutes the fifteen percent of candidates who would be better off elsewhere?

Other options
Research Universities argue that they can improve things if only funding would be adapted. But there are also other ways of achieving those goals, such as through new laws and regulations. For instance, the House of Representatives would like to closely supervise the language of instruction in different programmes, so that they use less English if that's not required. One consequence may be that fewer international students will come to the Netherlands.

Curbing growth, limiting competition for students and enforcing cooperation at a national level are other goals which can be achieved through the education and research sector plans. The cabinet has put aside 200 million euros for them. Programmes simply did not receive any money if they did not make these arrangements.

In a debate with the House of Representatives, the Minister of Education, Robbert Dijkgraaf, warned against expecting too much from capacity funding. The Ministry of Finance is simply making an amount available per student, he said. The funding for higher education increases or decreases based on the number of students. If you make a large proportion of funding stable, the flexible part becomes even more flexible.

After the elections
Things are not going to happen immediately. Even if more stable funding is included in the wish list of the upcoming government agreement, first a special committee will give some advice on the subject. Or perhaps the government will start by initiating a study into its advantages and disadvantages.

In 2021, the consultancy firm Berenschot already took a look at the relationship between flexible and fixed funding. At the time, money had just been transferred to fixed funding upon the advice of the Van Rijn committee. Berenschot concluded “that, from a technical point of view, the proportion of fixed and variable funding is not suitable as an instrument of control because the large differences between institutions ensure that there is no evidence of a clear stimulus effect”. In other words, we would not know exactly what we'd be incentivising. There would be little point in only having fixed funding.

On top of that, universities are not particularly transparent about current education expenditure. The higher education institutions receive their money as a lump sum. In principle, they themselves can decide how they spend it. They do not provide any information about the exact costs of degree programmes. Will this improve if capacity funding is introduced?

No solution
It is highly uncertain whether capacity funding is the solution to the problems politicians want to tackle, while accessibility to higher education will almost definitely be compromised if the approach to funding is actually changed.

Response from Universities of the Netherlands (UNL):
In response, the association of Dutch universities, Universities of the Netherlands (UNL), argues that universities constantly need to make trade-offs between quality, accessibility and efficiency. Capacity funding would bring some peace and quiet to the system. In addition, students would be spread more evenly across the whole country.

“Capacity funding ensures targeted and adequate funding and creates a stable environment in which there are no strong incentives for universities to grow”, according to a spokesperson. “And it solves financial problems where the research budget does not grow in line with the education budget. The Netherlands has an extremely accessible higher education system that we really want to preserve. We are taking account of this in our deliberations and recommendations.”