Financing of Higher Education: an evolution of Cost Sharing approach in Tanzania

Abstract

Higher education has more private than public returns (National Higher Education Policy, 1999). With this argument, it is rational for each beneficiary to pay for its costs. To the contrary, students and parents in Tanzania believe that financing of Higher Education used to be, is and has to remain the state responsibility (Ally, 2009). Although their stance might have emanated from poverty and socialist mindset; it is supported by scholarly work. For example; Bruce Johnstone (2004) as well as Fahima Charafeddine (2006) argues that, replacing public with private financing in developing countries is wrong because of the nature of services rendered by higher education and the state responsibility to provide these services as to promote sustainable development. With two antagonistic arguments, there are three questions. First; is it feasible to leave financing of higher education entirely with the government alone owing to bureaucracy and competing priorities on its insufficient budget? Second, is it feasible to leave financing of higher education entirely with beneficiaries whom public interest may not be their priority? And third, what has been the practice with regard to financing of higher education. This paper aims at answering these questions by providing an understanding of frameworks which have been used to finance higher education in Tanzania from colonial era to date. It specifically highlights drawbacks of the cost sharing scheme which was officially adopted in 1994 and managed by the Ministry of Science Technology and Higher Education. And finally, it  point out success and challenges faced by the current cost sharing scheme which was established in 2004 and  managed by Higher Education Students Loan Board (HESLB).

Keywords: Financing Higher Education, Cost Sharing, Higher Education Students Loan Board, Tanzania.